Investing.com – The Chinese yuan gained on Monday in Asia even after official data showing that China’s industrial profits fell for the second straight month in December. The U.S. dollar traded slightly lower amid dovish Fed expectations.
USD/CNY was down 0.1% to 6.7374 at 1:21 AM ET (06:21 GMT). The gain in the yuan came even after the National Bureau of Statistics reported earlier that profits of big Chinese industrial companies fell 1.9% year-on-year in December to 680.83 billion yuan ($100.94 billion).
In November, industrial profits declined 1.8% from a year earlier. It was the first contraction in profits in nearly three years.
For the full year of 2018, China’s industrial profit rose 10.3% to 6.64 trillion yuan ($986.37 billion), easing from 2017’s 21%.
Also Monday, The People’s Bank of China (PBOC) set the yuan reference rate at 6.7472 to the dollar, down from a previous fix of 6.7941.
Meanwhile, the U.S. dollar index that tracks the greenback against a basket of other currencies was down 0.1% at 95.400.
The Fed will conclude a two-day policy meeting on Wednesday and is widely expected to hold rates steady after raising them in December for the fourth time in 2018. The U.S. central bank has indicated that it will hike rates twice this year, but some officials have taken a more dovish tone over the past two months or so, putting the dollar under pressure.
The Fed will now also hold a press conference after each policy meeting, a change from the previous quarterly schedule.
Meanwhile, the ongoing trade negotiations between the U.S. and China will be in the spotlight as Chinese officials will arrive in Washington on Wednesday to continue talks with the U.S. aimed at resolving the long-running trade war between the two countries.
Traders will be watching for any hints of progress as the two sides try to agree on a deal before a deadline on March 1. If a deal is not reached by then, the U.S. could raise import tariffs on $200 billion worth of Chinese goods to 25% from 10%.