Monetary data out of China this morning suggest an impending uptick for the yuan (renminbi). The M2 money supply grew this past month less than forecast, which could suggest that China is honoring its commitment to lower its currency’s value.
Forecasts had anticipated an increase of 15.5% growth for the month of May, but this morning’s release revealed a 15.1% increase, indicative of a slow down in domestic money printing. The concurrent decline in new domestic loans may also explain part of this sluggishness. The data so far appears to be granting a mild uptick for the CNY, but analysts are expecting heightened volatility tomorrow considering the heavy slew of news getting published out of China.
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