A slew of positive data was reported from China overnight, with second quarter GDP growth coming in at a hotter than anticipated 6.90%, topping the consensus estimate of a 6.80% increase during the April to June period. China is targeting slower annual economic growth of 6.50% this year versus the 6.70% pace recorded in 2016. With the first two quarters of year recording 6.90% expansion, the Chinese government will now have a greater cushion to absorb slower growth during the second half of the year when tightened policy and deleveraging are likely to commence.
Separately, industrial output and retail sales came in well ahead of expectations at 7.60% and 11.00% respectively. Fixed asset investment from January to June also rose 8.60% year-on-year, edging past a Reuters poll of 8.50%. After tumbling last week, USDCNH is modestly higher on the session, trending near 6.7700.