Strong Exports in September Boosts China’s Economy

China’s yuan inched higher against the dollar on Wednesday, as investors digested upbeat exports data and shifted focus to whether the central bank would overturn maturing loans later this week.

In the spot market, the onshore yuan opened at 6.4509 per dollar and touched 6.4449, before ending at 6.4452, 20 pips firmer than the previous session close.

Before the market opened, the People’s Bank of China set the midpoint yuan rate at 6.4612 per dollar prior, weaker than the previous fix of 6.4447.

In September, China’s exports grew a surprising 28.1% over the same time last year, following a rise of 25.6% in August at a time when analysts had anticipated a pullback to 21%, reported Reuters.
Continued growth in exports could help carry China through the weakening in domestic consumption and power shortages that the country is currently experiencing.

Domestic demand was down, with imports only growing 17.6%, following a 33.1% gain the previous month. The combination has led to a trade surplus of $66.76 billion in September, up from analysts’ estimations of $46.8 billion, according to a poll by Reuters.