A piece via Reuters in brief:
- China does not appear ready cut rates, given unexpectedly strong Q1 growth data
- China appears reluctant to cut rates ahead of the Fed
- Yuan has been rising steadily since mid-March, its trade-weighted index has hit its highest since October 2022, its just not rising against a very strong USD
Reuters concludes:
- If Beijing can accept the US dollar strength it could ease monetary policy to prioritise economic support.
- The yuan might even emerge stronger on the ensuing rally in Chinese risk assets.
CNY CFETS index (Reuters chart):
