Forex Flash: China GDP hints downside risks for the economy - RBS

FXstreet.com (Barcelona) - According to RBS, the China GDP numbers "seem quite disappointing in light of the very rapid loan growth reported last year" says Greg Gibbs, strategist at the bank.

China, in view of Greg, "has proved sluggish to start the year and this suggests that the Chinese economy is less dynamic and reaching speed limits", adding that "with the government moving towards containing loan growth and control property speculation it suggests there are significant downside risks for the Chinese economy."

"The weakness in Chinese data may discourage the strong flow of capital into China, thus making the outlook for high yield and risk assets less clear. To date, the flow into CNY has gathered pace this year. We presume it will continue provided there is reasonable confidence in the stability in the economy, even if the outlook is less positive than past years" Greg concludes.