China’s yuan weakened the most in more than two months as slower export growth overshadowed a record trade surplus and the U.S. dollar advanced.
Overseas sales rose 4.7 percent in November from a year earlier, official data showed today, the least in seven months and short of the 8 percent median estimate in a Bloomberg survey. Imports fell 6.7 percent, taking the trade excess to $54.47 billion. A gauge of the dollar strength headed for its highest close since 2009 after data showing a surge in U.S. hiring strengthened the case for the Federal Reserve to increase interest rates.
“The trade data are weaker than expected,” said Dariusz Kowalczyk, a Hong Kong-based strategist at Credit Agricole CIB. The imports drop shows “poor domestic demand played a part,” he said.
The yuan fell 0.36 percent to 6.1727 per dollar in Shanghai, the biggest drop since Sept. 29, China Foreign Exchange Trade System prices show. That’s also the weakest level since Aug. 5. The People’s Bank of China raised the yuan’s fixing by 0.15 percent, the most since Nov. 10, to 6.12820 per dollar.
In Hong Kong, the offshore currency declined 0.24 percent to 6.1747, data compiled by Bloomberg show.
U.S. payrolls increased by 321,000 last month, the most in almost three years and higher than the most optimistic forecast in a Bloomberg survey, a report revealed Dec. 5.
“Given the environment of a broader dollar strength post non-farm payrolls, the yuan hasn’t been able to move away from the bearish dynamics,” said Eddie Cheung, a currency strategist at Standard Chartered Plc in Hong Kong.
China will keep economic growth in a reasonable range and maintain prudent monetary policy in 2015, Xinhua news agency reported on Dec. 5, citing a Politburo meeting. The PBOC last month cut lending and savings rates for the first time since 2012.
Twelve-month non-deliverable yuan forwards fell 0.31 percent to 6.3045 per dollar in Hong Kong, trading 2.1 percent weaker than the spot rate in Shanghai. The onshore rate was 0.72 percent lower than the fixing, within the 2 percent daily limit.