RIYADH: The yuan eased on Wednesday, weighed down by signs that China’s COVID-19-hit economy is struggling to regain momentum and by lingering concerns over heightened Sino-US tensions over Taiwan.
The currency’s losses were limited, however, by caution ahead of US inflation data later in the global day, which could provide hints to the Federal Reserve’s plans for future monetary tightening and the direction of the dollar.
The People’s Bank of China set the midpoint rate at 6.7612 per dollar prior to the market open, weaker than the previous fix of 6.7584.
Factory inflation at 17-month low
China’s factory-gate inflation eased to a 17-month low in July, defying global cost pressures as slower domestic construction weighed on raw material demand, although consumer prices picked up pace, driven mostly by tight pork supplies.
The producer price index rose 4.2 percent year-on-year, the National Bureau of Statistics, said on Wednesday, after a 6.1 percent uptick in June and missing analyst forecasts for a 4.8 percent increase.
China’s producer price growth has slowed from a 26-year high hit in October last year, giving policy makers some leeway to stimulate the flagging economy even as central banks elsewhere scramble to hose down rampant inflation with aggressive interest rate hikes.
China’s Lenovo reports slowest revenue growth in eight quarters
Lenovo Group, the world’s biggest maker of personal computers, reported flat revenue for the April to June quarter when many Chinese cities were hit by COVID-19 lockdowns, marking its most subdued result in eight quarters.
Total revenue during the period was $16.96 billion, up 0.2 percent from the same quarter a year ago though it was in line with an average Refinitiv estimate of $16.87 billion drawn from seven analysts. That was the smallest quarter-on-quarter increase since the period ending in March 2020.
However, Lenovo has made big strides in expanding into other higher-margin businesses such as server operation, information technology services and mobile devices, with Lenovo’s non-PC business now accounting for 37 percent of the company’s revenue. For the quarter, net income attributable to shareholders rose 11 percent to $516 million.
Yang Yuanqing, Lenovo’s chairman and CEO, said the company is “diversifying from a pure PC business to a company that offers a broad range of intelligent products and solutions.”
(With input from Reuters)