China Is Set to Release August’s Economic Data as USD/CNH Rises

Chinese Yuan

Market sentiment has soured overnight during New York trading, which might open up a risk-off for Asia-Pacific trading. US stock indexes fell following the little impact of the economic data on Federal Reserve rate hike bets. Fed funds futures have shown a 22.1% chance for a 100 bp rate hike at next week’s FOMC policy announcement.

Gold fell to its lowest since April 2020. US retail sales for August exceeded expectations as it rose by 0.3% in August from the July percentage. Initial jobless claims data showed that the labor market is weathering higher rates. Treasuries were under selling pressure throughout yesterday. The US yield rose, with the 10-year rate moving above 1%, weighing on bullion and pushing it below a critical level of support.

Gold was already in a risky spot ahead of the data, and it appears that gold and silver are ready for more downside.

The US Dollar DXY index had a little change overnight. The averted rail strike increased pressures in the broader commodity space, and WTI crude and Brent crude oil prices were not left out. Lumber prices fell nearly 7% in Chicago, and wheat shed over 3%.

The USD/CAD surged, reaching its highest level since November 2020; however, the falling prices of key Canadian exports, lumber, and oil prices weigh down the currency.

The AUD/USD and NZD/USD currency pairs were down by over 0.5%. The Chinese Economic data for August includes reports on fixed asset investment, industrial production, and retail sales.

Economic experts expect that Industrial production will remain unchanged at 3.8% y/y, though retail sales are rising to 3.5% from 2.7% y/y. should today’s data be weak, the Chinese Yuan may plunder to more downing.

The Chinese Yuan broke above the 7 levels against the US Dollar. The People’s Bank of China (PBOC) has delivered several weeks of daily fixings below market expectations. The central bank may, however, get more aggressive with rate hikes as prices are above 7, but with most of the Yuan’s weakness coming from USD strength, it is yet to be seen.

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