CNY: Currency strengthens even as trade slows – Commerzbank

Yuan Strengthens Despite Shrinking Surplus

According to Volkmar Baur from Commerzbank, China’s trade figures for March fell short of expectations. Export growth lagged behind projections, while imports saw a significant jump, resulting in a reduced trade surplus. Baur suggests that the current account surplus likely moderated from the record levels seen in the fourth quarter.

Even with this moderation, the Chinese yuan has gained ground against the US dollar. The USD/CNY exchange rate has dropped below 6.82, marking its lowest point in more than three years.

Trade Data Insights

Baur estimates that, relative to GDP, China’s current account surplus for the first quarter was probably a bit lower than the 4.9% peak reached at the end of last year.

• Imports surged by 27.8% year-on-year, far exceeding forecasts.
• This robust import growth led to a smaller trade surplus, which, at $51.1 billion, remains substantial.

Currency Performance

Since the beginning of the month, the yuan has appreciated by more than one percent against the dollar—a notable development given the persistent uncertainties in the Gulf region.

(This report was produced with the assistance of AI technology and subsequently reviewed by an editor.)