Published at 04:39 (GMT) 14 May
China's economy is sputtering as evidence mounts that a nationwide property bubble is on the point of bursting. Virtually every indicator for economic growth in China turned down in April as the all-important real estate market saw sales fall 7.8 per cent in renminbi terms in the first four months from the same period a year earlier. In the first four months newly started construction projects fell 22.1 per cent compared with a year earlier, according to government figures released on Tuesday. The sustainability of the Chinese real estate market has become a concern for policy makers everywhere as they start to worry that a property crash in the world's second-largest economy could ripple round the globe. In an indication of just how exposed China's economy is to a property downturn, Moody's Analytics estimates that the building, sale and outfitting of apartments accounted for 23 per cent of Chinese gross domestic product last year.
USD/CNH lower on the day as well following the fall in USD/CNY onshore spot and 1Y NDFs, seen at a low of 6.2304 from 6.2403. No surprise to see the fixing lower at 6.2324, with USD/CNH trading at 6.2326 before the release. Next level of support is seen at 6.2230 but with onshore spot already moving higher, we expect any dips to be limited below 6.2300. C.L
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