Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Forex - Yuan Falls on Weak CPI, PPI; U.S. Dollar Rises Despite Retail Sales Data

Published 02/15/2019, 12:23 AM
Updated 02/15/2019, 12:23 AM

Investing.com - The yuan fell against the U.S. dollar on Friday in Asia after data showed China’s January Consumer Price Index and Producer Price Index both missed expectations.

The country’s CPI rose 1.7% in January from a year earlier, slower than the 1.9% increase in December and below market expectations for a 1.9% rise.

Meanwhile, the PPI rose 0.1% year-on-year in January, the weakest pace since September 2016 and slowing from the previous month's 0.9% increase.

Generally speaking, a high reading is seen as positive for the yuan, while a low reading is seen as negative for the Chinese currency.

The USD/CNY pair last traded at 6.7753 at 12:23 AM ET (5:23 GMT), up 0.1%.

Meanwhile, the U.S. dollar index that tracks the greenback against a basket of other currencies was also up 0.1% at 96.893.

The rise in the dollar came even after the U.S. Commerce Department reported on Thursday that U.S. retail sales fell for the first time in ten months in December.

CIBC said one weak reading shouldn't prove worrisome as a strong labour market will lend support to consumer spending in the coming months.

"Still, today's data reinforces the Fed's cautious stance for the time being and will weigh on the USD and see yields fall," the bank added.

The market now awaits developments in trade talks between Washington and Beijing.

U.S. President Donald Trump's upbeat assessment of the talks earlier in the week raised hopes that the two sides might still be able to reach a deal before the March 1 deadline, but headlines that came out today suggested an agreement might still be some way off.

Citing three unnamed U.S. and Chinese officials, Bloomberg reported that the two countries have made little progress so far during their discussions in Beijing this week. They have failed to narrow the gap on issues related to structural reforms to China’s economy, according to the report.

Elsewhere, the AUD/USD pair fell 0.2%. Reserve Bank of Australia Governor Christopher Kent said in a speech in Melbourne Friday that he thinks recent weakness in the Aussie dollar might be helpful to the economy.

“While the exchange rate is still within the relatively narrow range of the past few years, the recent depreciation is helpful at the margin given that there remains spare capacity in the economy and inflation remains below target,” he said.

Latest comments

the joys of interest rate differentials. that being said since us monetary policy has been divergent compared to the rest of the world and deflationary pressures are growing. I'm surprised the dollar isn't way higher
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.