Offshore yuan weakens amid mixed data and policy outlook

The offshore yuan continued to weaken, trading around 7.28 per dollar, as traders assessed mixed economic data from China.

Offshore yuan weakens amid mixed data and policy outlook

Retail sales grew 3% year-on-year in November, down from 4.8% in October and falling short of market expectations of 4.6%, marking the weakest growth since August. The unemployment rate held steady at 5%, which aligns with forecasts. On a positive note, industrial production rose 5.4% year-on-year, slightly exceeding both market expectations and October's 5.3% growth. Fixed-asset investment increased 3.3% from January to November, just below market forecasts and October’s 3.4% growth.

Yuan faces downward pressure as China signals looser policies

The yuan is expected to face continued downward pressure next year, as last week's Central Economic Work Conference indicated plans for looser fiscal and monetary policies to boost growth and address potential U.S. trade challenges. While the conference outlined broad policy objectives, more specific measures will be revealed during the annual legislative sessions in March.