Chinese Yuan Weakens Despite Solid GDP Data

The offshore yuan depreciated past 7.27 per dollar, hitting five-month lows despite stronger-than-expected GDP numbers on China.

Official data showed that the country’s economy expanded 5.3% in the first quarter from a year ago, higher than the 5.2% seen in the previous quarter and beating expectations for a 5% growth.

Analysts said that strong first quarter growth will likely prevent authorities from easing policy further, which should provide some support to the yuan.

However, industrial production and retail sales in China rose less than anticipated in March.

Externally, the yuan faced downward pressure from a rallying dollar as strong US retail sales figures cemented expectations that the Federal Reserve will delay interest rate cuts.

Markets now see the Fed delivering its first rate cut in September, much later than previous forecasts of June.