According to the latest consumer inflation report released by China’s official statistical office, the rate of consumer inflation slowed down in August 2016. This slowdown has already been going on for 4 months. The key reason for this slowdown is lower food prices.
At the same time, the Chinese rate of inflation remains below the target level. For example, the Chinese CPI (Consumer Price Index) reached only 1.3% YoY in August 2016. For the sake of comparison, it was 1.8% YoY in July 2016. As for the MoM inflation figures, they sowed down to 0.1% in August against 0.2% in July.
We remind you that the level of inflation is still below the target set by the People’s Bank of China, which is the country’s central bank. The inflation target is 3%. This is why the central bank can still apply the same easy money-and-credit policy.
The PPI index showed a slowdown in August as well. It dropped by as much as 0.8% YoY over the reporting period. July’s drop was even bigger – 1.7% YoY. The PPI has been slowing down for mover 4 years in a row.
FOREX
Masterforex-V Academy experts report that the Chinese Yuan is still getting stronger against the US Dollar. This means that USDCNY is going down. The closest major level of support is the local low of 6.6135. At the same time, the closest major levels of resistance are 6.6902 and the 6.7066 high.
