USD/CNH is drifting lower. China economic activity edged up in March, BBH’s FX analysts report.
Outlook set to remain unimpressive
“The composite PMI increased to a three-month high at 51.4 vs. 51.1 in February driven by a pick-up in manufacturing and non-manufacturing growth momentum. The manufacturing PMI rose 0.3 points to a one-year high at 50.5 (consensus: 50.4) and the non-manufacturing PMI improved 0.4 points to three-month high at 50.8 (consensus: 50.6).”
“However, the growth outlook will remain unimpressive as long as policymakers fail to address the root cause of weak consumption spending activity: low household income levels, high precautionary savings, and high levels of household debt.”