The main economic data released overnight was China’s latest CPI report for July, notes MUFG FX analyst Lee Hardman.
USD/CNY rises again towards the 7.1800 level
“The report revealed that headline inflation picked up modestly by 0.3 points to 0.5% in July. The core measure of inflation fell to 0.4% in July from 0.6% in May-June. The release of the latest PPI report revealed that producer price deflation continued as it fell to an annual rate of -0.8% in July. Overall, inflation developments coupled with the recent loss of growth momentum in the second quarter will keep pressure on the PBoC to lower rates further this year.”
“The renminbi has given back some of its recent gains over the past week. After hitting an intraday low of 7.1153 on August 5, the USD/CNY has climbed back towards the 7.1800 level. The renminbi has benefited along with the yen and other Asian currencies from the recent position liquidation as popular short positions have been reduced.”
“This has meant that the renminbi has strengthened following the PBoC’s decision to cut rates further towards the end of last month. Although yields in China have continued to fall over the past month, this has been more than offset by the further decline in US yields as market participants have begun to price in a higher likelihood of more aggressive rate cuts from the Fed.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
