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CNHUSD

Offshore Yuan Retreats After Inflation Data

The offshore yuan weakened to around 6.74 per dollar on Monday, retreating from a more than three-year high reached in the previous session, as softer inflation data underscored persistent weakness in domestic demand. Annual consumer inflation eased to a six-month low of 0.5% in July, reflecting declines in food prices and slower growth in non-food costs. Producer price inflation also moderated to 3.5% from 4.1%, marking its first slowdown since returning to positive territory in March amid an oil-price surge triggered by Middle East tensions. Meanwhile, the Political Bureau of the Communist Party of China Central Committee recently pledged more proactive and effective macroeconomic policies, including the faster deployment of fiscal funds and bond proceeds, while continuing to support large-scale equipment upgrades and consumer goods trade-in programs. It also emphasized the need to boost domestic demand as consumer spending remains subdued despite solid exports and industrial output.

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