Chinese trade data proved far stronger than even bulls had imagined. The surprise rise in Chinese exports spurred hopes of an economic recovery following the coronavirus lockdown.
China’s overseas shipments in April rose for the first time this year as factories raced to make up for lost sales. Beijing reported exports rose 3.5% in April on a year earlier, far away from expectations of a 15.1% fall. The surprise stoked speculation China could recover quicker than first thought and support global growth in the process.
While Chinese economy show signs of recovery, things in the US and Europe seem less hopeful.
Two new pieces of economic data that roll out this week will show just how bad the US economy has gotten. On Thursday the weekly jobs report is expected to show how many more people have filed for first-time unemployment benefits. On Friday new monthly unemployment numbers could show the worst jobless rate since the Great Depression. Experts predict an average of 16%.
Things are much the same in Europe. The Bank of England predicts the UK economy is heading for its worst crash in 300 years. And the EU’s economy could shrink by 7.5%, a steeper decline than during the 2008 financial crisis.
START TRADINGForex – Chinese trade data embraced by traders
Stronger-than-expected Chinese export numbers lifted hopes in global markets that China can rebound quickly and help global growth recover.
The dollar climbed to two-week highs on Thursday, garnering more safe-haven bids. In morning trading, the dollar index rose 0.1% to 100.30, just off a two-week high touched earlier in the session of 100.33.
The greenback also climbed 0.3% versus the Swiss franc to 0.9776 franc.
The Canadian dollar strengthened against its U.S. counterpart on Thursday as oil rallied and data showing an unexpected increase in Chinese exports raised hopes for the global economy. The loonie rebounded from an earlier two-week low trading 0.5% higher at 1.4077 to the greenback.
The safe-haven yen edged away from near seven-week highs against the dollar. Surprise Chinese trade data reduced demand for the safe-haven yen. The U.S. dollar was last up 0.45% at 106.57 yen, having fallen on Wednesday to 105.985, its weakest since mid-March.
Chinese exports rise helped the Australian dollar, which was last up 0.9% at $0.6464.
The euro dipped to $1.07785, its lowest level in almost two weeks on Thursday, reversing modest gains earlier in the day. The common currency has shed more than 1.5% this week and is set for its biggest weekly drop in just over a month.
Sterling rallied after the Bank of England left interest rates steady and held off on more stimulus. The British currency trimmed its gains as the session wore on. It was last up just 0.1% at $1.2359, off a session high of $1.2418.
Oil prices jumped on Thursday following the news that China’s exports unexpectedly rose last month.
Brent crude was up 6.9%, or $2.05, at $31.77 a barrel by 1318 GMT. In the previous session, the price dropped 4%. US WTI futures climbed 10.55%, or $2.53, to $26.52 a barrel, after falling more than 2% on Wednesday.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money