USD/CNH is holding above key support at 7.1200, BBH FX analysts report.

China trade surplus hits record

"China’s August trade data continues to point at weak domestic demand activity and decoupling with the US. In the twelve months to August, China’s trade surplus rose to a record $1165.8bn while the trade surplus with the US narrowed to $473bn in August, the lowest since January 2021."

"In August, both exports and imports growth fell short of expectations. Exports increased 4.4% y/y (consensus: 5.5%) vs. 7.2% in July and imports rose 1.3% y/y (consensus: 3.4%) vs. 4.1% in July. Softer import growth underscores persistently weak domestic demand."

"In our view, a gradual revaluation of China’s currency could help China stimulate consumer spending by boosting disposable income through cheaper imports. Bottom line: USD/CNH has room to break lower."