Chinese economic growth likely to remain intact, GDP to have grown 6.7 pct in Q2

China’s economic growth likely to have slowed marginally in the second quarter. In the first quarter, the real GDP had grown 6.8 percent year-on-year, matching the growth rate recorded in the earlier two quarters. But recent monthly indicators point to a likely slower rate of GDP growth recorded in the second quarter. Retail sales rose only 8.5 percent in May year-on-year, the slowest rate of growth since 2003, and fixed investment spending rose similarly slower by 6.1 percent, strengthening the continued downshift in capital-intensive production as the economy continues to move consistent with its advanced counterparts.

The Chinese central bank also cut its required reserve ratio by 50 basis points, and this easing of monetary policy along with ongoing trade dispute caused the Chinese renminbi to depreciate notably against the U.S. dollar in recent weeks.

“We look for the expansion in China to remain intact, albeit at a slower pace than the double-digit growth rates the economy enjoyed in previous years, and forecast real GDP growth of 6.7 percent in Q2”, stated Wells Fargo.

At 21:00 GMT the FxWirePro's Hourly Strength Index of Chinese Yuan was highly bearish at -139.494, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 17.2297. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex