China`s Yuan Slides Over Concerns of Disinflation

Published on Jul 10, 2023 12:19

China`s yuan weakened against the dollar on the back of disappointing inflation data that added to disinflation concerns. China`s factory-gate prices fell at the fastest pace in over seven-and-a-half years in June, while consumer inflation was at its slowest since 2021, reflecting weakening demand recovery. The producer price index (PPI) fell for a ninth consecutive month, down 5.4% from a year earlier, marking the steepest decline since December 2015 while consumer price index (CPI) was unchanged year-on-year, compared with the 0.2% gain seen in May. The yuan weakened to 7.24 per dollar, lingering near November 2022 lows after the data. For the year, the currency is down nearly 5%. Meanwhile, mild recovery in the dollar after a sharp fall over the weekend post disappointing jobs report is also seeing weighing on the Chinese currency.