USD/CNH consolidates near 7.1300 amid mixed Chinese PMI data, with the downtrend intact as structural growth challenges persist, BBH FX analysts report, BBH FX analysts report.

Chinese data fails to alter USD/CNH downtrend

"USD/CNH is directionless around 7.1300. China’s September PMIs were mixed. The official PMI showed the contraction in manufacturing activity eased to 49.8 vs. 49.4 in August while the private-sector RatingDog PMI showed manufacturing activity expanding at the fastest pace in six months to 51.2 vs. 50.5 in August."

"Similarly, the official PMI showed non-manufacturing activity stalling at 50.0 vs. 50.3 in August while the private-sector RatingDog PMI showed services activity remained solid at 52.9 vs. 53.0 in August."

"Overall, to address its soggy growth outlook, China must shift its growth model toward one in which domestic consumption plays a greater role. 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 downtrend is intact."