China released the August Consumer Price Index and Producer Price Index as follows:
- August PPI +2.3 pct from a year ago (Reuters poll +3.1 pct).
- August CPI +2.5 pct from a year ago (Reuters poll +2.8 pct).
- August PPI -1.2 pct from the previous month.
Producer inflation pressures are expected to continue decelerating in August and the data has weighed on the Aussie a touch as it struggles to maintain the bid vs. a softer US dollar in the Tokyo session.
H1 chart
The price has run into resistance and could be expected to correct before taking on the 0.68 figure for an extended bullish recovery.
About of Chinese CPI
The Consumer Price Index is released by the National Bureau of Statistics of China. It is a measure of retail price variations within a representative basket of goods and services. The result is a comprehensive summary of the results extracted from the urban consumer price index and rural consumer price index.
The purchasing power of the CNY is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. A substantial consumer price index increase would indicate that inflation has become a destabilizing factor in the economy, potentially prompting The People’s Bank of China to tighten monetary policy and fiscal policy risk. Generally speaking, a high reading is seen as positive (or bullish) for the CNY, while a low reading is seen as negative (or Bearish) for the CNY.
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