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9 Feb 2015
Weak trade report adds to China growth concerns – BTMU
FXStreet (Barcelona) - Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, views that China’s weak trade report has raised concerns over China’s growth, expecting that the contraction of exports by 3.3% and imports by 19.9% is likely to heighten concerns that authorities might weaken the renminbi.
Key Quotes
“The renminbi has weakened in the Asian trading session following the release of the weaker than expected trade report from China. The report revealed that the annual rate of export growth contracted by -3.3% in January compared to consensus expectations for an expansion by 5.9%.”
“The weakness in exports appears broad-based driven in part by weak external demand from Japan and the Euro area.”
“Import growth was also much weaker than expected contracting by an annual rate of -19.9% in January compared to consensus expectations for a modest contraction of -3.2% which in part reflects the impact of lower commodity prices but will also raise concerns over the strength of domestic demand.”
“Weaker import growth resulted in China recording a record trade surplus of USD60 billion.”
“The report will likely heighten investor expectations that the Chinese authorities may begin to more actively weaken the renminbi in the coming months if export growth continues to remain weak.”
“However with China running record trade surpluses any attempts to weaken their currency are unlikely to unwelcomed by the international community.”
Key Quotes
“The renminbi has weakened in the Asian trading session following the release of the weaker than expected trade report from China. The report revealed that the annual rate of export growth contracted by -3.3% in January compared to consensus expectations for an expansion by 5.9%.”
“The weakness in exports appears broad-based driven in part by weak external demand from Japan and the Euro area.”
“Import growth was also much weaker than expected contracting by an annual rate of -19.9% in January compared to consensus expectations for a modest contraction of -3.2% which in part reflects the impact of lower commodity prices but will also raise concerns over the strength of domestic demand.”
“Weaker import growth resulted in China recording a record trade surplus of USD60 billion.”
“The report will likely heighten investor expectations that the Chinese authorities may begin to more actively weaken the renminbi in the coming months if export growth continues to remain weak.”
“However with China running record trade surpluses any attempts to weaken their currency are unlikely to unwelcomed by the international community.”