Later today we have the GDP q/y release for the Chinese Yuan. Traders who are bullish on the Yuan will be hoping to see a positive number. Set your alarms for 02:00AM GMT, this will be a release you can't miss.
What is it?
The GPD q/y release is a metric that measures the change in the inflation-adjusted value of all goods and services produced by the economy. However, the actual definition of GDP (Gross Domestic Product) is the total monetary value of all the finished goods and services produced within a country. Since the GDP figure acts as a broad measure of overall production within a country, it is safe to say that the metric can be used to assess a country’s economic health. This is why we care so much about GDP.
What are the Expectations for the NZD GDP Q/Q Release?
Previously in April 2021 the change in GDP was at 18.3%. The expectation for June 2021 for China's GDP q/y is a modest 8%. This is a big improvement, but will that be the case?
“China is running out of time to deal with its mountain of bad debt and resulting financial risk,” said Diana Choyleva at Enodo Economics, adding that 2021 would probably be “a distinctly binary year” for the Chinese economy.
Will China fully bounce back this year? It seems like this is not the case. While experts might think this won't be the best year for China, it is definitely a lot better than many other countries.
What happens if...
We see a GDP change higher than 8%? If we are to see an increase in GDP change, for example, 10%, then the Chinese Yuan is expected to appreciate as a higher GDP signals a strengthening economy.
What happens if...
We see a GDP change lower than 8%? If we are to see a decrease in GDP change, for example, 3%, or even worse a negative number, then the Chinese Yuan is expected to depreciate, as a lower GDP signals a weakening economy. Naturally, this will mean that the Yuan will decrease in value versus other currencies.
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