USD/CNY rises as China retail sales miss, property crisis deepens

USD/CNY strengthened 0.4% to 7.2850 following disappointing Chinese economic data that reinforced concerns about the world's second-largest economy. November retail sales grew only 1.3% year-over-year, significantly below the 2.9% forecast, marking a sharp deceleration in consumer spending. Industrial production also underperformed at 4.8% versus expectations of 5.0%. Most concerning was the property sector, with investment plummeting 15.9% in the first 11 months of 2024, accelerating from the previous decline. This data suggests China's economic recovery remains fragile despite recent stimulus efforts by the People's Bank of China. The weak data is likely to pressure the PBOC to implement further monetary easing, potentially through rate cuts or liquidity injections. Technical indicators show USD/CNY approaching the 7.30 resistance level, with momentum indicators suggesting further yuan weakness if Chinese authorities don't intervene to support their currency.