export

In February the trade deficit posted by China was the largest in seven years as the Lunar New Year holiday dealt a sharper blow to export activity than expected. The reading was China’s first trade deficit since last March and the biggest since February 2004.

"Both imports and exports are lower than expected, and seasonal factors alone can't explain the sharp monthly drop," said Xu Biao, economist with China Merchants Bank in Shenzhen.

Deputy governor of Chinese central bank Yi Gang said in remarks published on Thursday that the yuan could potentially become a world reserve currency as the country gears up to boost its global presence.

"Why do global investors like to hold a certain currency and make investments in a market? They mainly consider its safety, returns and depth, and the liquidity of the market. China's market and the yuan have full potential," Yi said in an article published in the official Financial News.

The yen dropped on speculations that Japanese authorities may act to hinder further advance in the currency that is driving the nation’s export-led economic recovery.

Japan’s currency retreated from a five-week high against the euro after Finance Ministry and Bank of Japan officials met to discuss financial markets.

Stock futures are rising, pointing to a higher opening Monday, following strong gains in overseas markets.
Stocks are getting a lift globally after a new report showed Chinese exports jumped by nearly 18 percent in December. The bigger-than-expected increase follows 13 straight months of declines. The increase in exports has added confidence to investors who believe a global economic rebound is well under way.

China’s exports and imports last year increased at an unexpected rate which is considered by many economists as an evidence of the economy health and the necessity to make the yuan appreciate again.

The reports show that exports climbed by 17.7% against the year ago beating the economists’ expectations of 4.0% increase. Meantime, imports also jumped 55.9% which with usury exceeds the 31.0 percent increase markets had expected.

 On Friday an official Chinese newspaper made a comment on the weakness of the US dollar saying it is "holding back" other countries' economic recovery, forcing them to choose between squeezed exports and inflation risks. The Chinese-language People's Daily said that the dollar creates problems for many nations across the globe.

According to European Union Chamber of Commerce in China report, the country’s overcapacity is a long-standing disaster in China. Moreover, excess capacity has affected ever more destructively in terms of global financial slump.

 Thus the report concludes, China needs far-reaching structural reforms to root out industrial overcapacity, which is doing untold damage to domestic growth and the global economy.

 The dollar has a good perspectives being likely to trade higher in the week ahead. Worse-than-expected U.S. non-farm payrolls data for October showed on Friday, was taken as the driving force for currency markets at least until mid week.

The dollar enlarged a gain against most major currencies other than the yen after the government’s announcement about the unemployment rate growth to 10.2 percent, the highest level since April 1983. 

 Appearing at the meeting of Economic Recovery Advisory Board the US President Barack Obama stated that while the economy turned its direction to a healthy path there are still job losses expected further. He called for a new "post bubble growth model" with greater focus on U.S. exports, citing the success of Germany in this area.