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Annual Report 2016

yuan exchange rate. The average Chinese composite

PMI increased to 51.4 in 2016 compared with 50.4

in 2015.

Foreign exchange currency developments

On the currency markets, the US dollar generally

appreciated in the second half of the year after US

GDP growth accelerated. This, in addition to further

strengthening of the labour market in that country

and receding concerns regarding emerging econo-

mies’ growth — especially for China — supported the

case to increase interest rates by the US Fed. This

led to a rate hike at its December meeting, while the

European Central Bank (ECB) and the BoJ remained

engaged in stimulus programmes. Further upside to

the US dollar was provided after the US election by

the expectation of a faster pace of economic growth

in that country, supported by potential stimulus pro-

grammes to be implemented by the upcoming admin-


The US dollar rose by 3.2% y-o-y


the euro

and increased by 2.4% y-o-y compared with the Swiss

Franc. Moreover, it rose by 19.9%


the pound

sterling, reflecting the impact of the Brexit referen-

dum outcome. However, it declined against the yen

by 4.9%. Among emerging market currencies, the Chi-

nese renminbi depreciated by 7.3% y-o-y against the

US dollar, while the Indian rupee lost 2.0% as well.

Meanwhile, commodity exporters’ currencies recov-

ered, with the Brazilian real, the Russian ruble and

the South African rand gaining 13.4%, 10.7% and

7.3%, respectively.