Forex – Yuan Gains Despite Weak China Data; U.S. Dollar Slips

0 – The yuan gained on Thursday in Asia even after official data showed China’s industrial profits recorded their first contraction since December 2015.

The USD/CNY pair slipped 0.1% to 6.8919 at 12:43 AM ET (05:43 GMT).

Industrial profits fell 1.8% to 594.8 billion yuan in November from a year earlier, the National Bureau of Statistics reported on Thursday in Asia.

Meanwhile, Bloomberg reported that the U.S. and China are set to resume trade talks in early January.

A U.S. government delegation will travel to Beijing in the week of Jan. 7 to hold the first face-to-face trade talks with Chinese officials since U.S. President Donald Trump and his Chinese counterpart Xi Jinping agreed on a 90-day truce in Argentina earlier this month, Bloomberg reported citing two people familiar with the matter said.

The People’s Bank of China (PBoC) fixed the yuan’s reference rate at 6.8894 for Thursday compared to the previous session’s 6.8825.

In Open Market Operations (OMO), the PBoC also injected 250 billion yuan via 7-day repo operations, bringing the day’s OMOs to a net 30 billion yuan after the day’s 120-billion maturity.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies was down 0.2% to 96.395.

U.S. equities rebounded on Wednesday as easing tensions between the White House and the U.S. Federal Reserve lifted market sentiment.

White House economic adviser Kevin Hassett told reporters that Fed Chairman Jerome Powell’s job was “100 percent” safe and that Trump won’t try to fire him.

Last week, the Federal Reserve hiked rates for the fourth time this year and reports suggested Trump was discussing the possibilities with his advisors whether he has the authority to fire Powell.

Elsewhere, the USD/JPY pair declined 0.3% to 111.09.

The AUD/USD pair and the NZD/USD pair both lost 0.2%.

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