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• China’s trade surplus contracted to USD 80.6 billion in July 2023, compared to USD 102.7 billion in the same period last year.
• Exports dropped by 14.5% YoY, marking the third consecutive monthly decline and the sharpest fall since February 2020.
• Imports decreased by 12.4%, the steepest drop in six months.
• The politically sensitive trade surplus with the US widened to USD 30.3 billion in July, reaching USD 181.8 billion for the first seven months of 2023.
• Exports to major trade partners, including the US, ASEAN countries, and the EU, faced significant declines.
• However, exports of rare earths surged by 49% YoY in July, driven by strong demand from new energy vehicles and wind power sectors.
• Imports to China dropped by 12.4% in July, with copper purchases falling but crude oil, iron ore, and soybeans seeing increases.
• Purchases from various countries, including the US, EU, and South Korea, declined, while imports from Russia fell for the first time since February 2021.
• For the first seven months of 2023, China’s trade surplus reached USD 489.57 billion, with exports and imports contracting by 5% and 7.6%, respectively.

The Chinese Yuan has experienced a 0.3% decline against the dollar, leading to a state of micro balanced behavior around the current highs. This suggests that larger positions might be undergoing adjustments to adapt to new risk parameters.

On the daily interval, the Yuan is trending higher, favoring the dollar due to monetary stimulus. This trend may result in the establishment of a balanced rate range, with potential targets including the upper extreme and the current swing highs for absorption opportunities.

1 Month Ago

The Yuan’s higher trade balance continues to act as a supportive factor for the currency. However, the ongoing lower export and import data exert downward pressure on its value.

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