You are here: Home > articles > Forex > Chinese exports to moderate in March but outlook clouded by trade war fears – Forex News Preview
Chinese exports to moderate in March but outlook clouded by trade war fears – Forex News Preview
April 12, 2018 9:26 amVideo
Latest News
- Technical Analysis – GBPUSD tries to recoup some losses April 18, 2024
- USD/JPY in crisis April 18, 2024
- EUR/USD: trading plan for US session on April 18. EUR gets stuck at 1.0686 April 18, 2024
- Fed to keep policy tight for longer than markets view April 18, 2024
- Technical Analysis – BTCUSD drops to 6-week low as halving looms April 18, 2024
- Midweek Technical Look – EURUSD, US 500, WTI April 18, 2024
- Technical Analysis – AUDJPY pulls back but stays in uptrend April 18, 2024
- Forex forecast 04/18/2024: EUR/USD, USD/JPY, Oil and Bitcoin from Sebastian Seliga April 18, 2024
- Video market update for April 18, 2024 April 18, 2024
- Technical Analysis – WTI oil futures exit sideways move to the downside April 18, 2024
- Market Comment – US dollar on the back foot as nervousness lingers in equity markets April 18, 2024
- Hot forecast for EUR/USD on April 18, 2024 April 18, 2024
- EUR/USD and GBP/USD: Technical analysis on April 18 April 18, 2024
- Trading plan for GBP/USD on April 18. Simple tips for beginners April 18, 2024
- Trading plan for EUR/USD on April 18. Simple tips for beginners April 18, 2024
- The Fed and global instability: a double blow to American markets April 18, 2024
- Forecast for EUR/USD on April 18, 2024 April 18, 2024
- Forecast for GBP/USD on April 18, 2024 April 18, 2024
- Forecast for AUD/USD on April 18, 2024 April 18, 2024
- Outlook for GBP/USD on April 18. Pound was not impressed by the inflation data April 18, 2024
Trade figures out of China are scheduled for release on Friday for the month of March, with consensus forecasts of a sharp deceleration in exports and a smaller trade surplus. The data comes amid heightened risk of a trade war between China and the United States as the two economic powerhouses quarrel over unfair trade practices.
Chinese exports surged by 44.5% year-on-year in February – the biggest jump in three years – mainly due to the effects of the timing of this year’s Lunar New Year. However, export growth is expected to come down to more typical levels to 10% y/y in March. If confirmed, it would be the 13th month in-a-row of positive growth in the country’s exports, suggesting little risk of a return to the slowdown seen in 2015-2016. Imports are also forecast to rise by 10% in March, up from 6.3% in the prior month. The trade balance is expected to show a smaller surplus of $27.21 billion compared with a surplus $33.75 billion in February.
Worse-than-expected data could raise concerns of a deeper slowdown in economic growth in 2018 than the mild moderation to 6.6% from 6.9% in 2017 being forecast by most analysts. Investors will get the chance to assess the first glimpse of GDP performance in 2018 when first quarter growth figures are published on April 17.
On Wednesday, inflation data revealed both consumer and producer prices rose by less than expected in March on the back of slowing credit growth, as Chinese authorities maintained their efforts to deleverage the economy. Other recent data has also been mixed with the official and Caixin/Markit manufacturing PMIs diverging since the beginning of 2018.
Despite the not-so-robust indicators however, as well as recent concerns of a possible trade war with the US, most analysts are optimistic about China’s economic fundamentals, especially after President Xi’s speech this week where he promised more reforms and to open up the economy to foreign firms.
A positive surprise in Friday’s trade numbers would underscore the upbeat outlook. It could also help the yuan move closer to the 2½-year high of 6.2410 set back in March. The yuan had come under brief pressure on Monday on reports that the Chinese government is considering devaluating the currency as a possible tool in any trade war. But a conciliatory tone by President Xi in his address at the Boao Forum for Asia helped calm market nerves of an escalation in trade tensions with the US.
The subsequent rise in risk appetite helped the Australian dollar climb to a three-week high of $0.7773 on Wednesday. The aussie could extend those gains if the China trade figures beat the forecasts. Aussie/dollar could head towards 0.7780, close to its 50-day moving average. A stronger boost could take the pair to 0.7820, which is the 50% retracement of the December-January upleg. A negative surprise though could see aussie/dollar retreating back to the 0.77 level. A breach of this handle would bring the 0.7650 support region coming back into view.
Related Posts: