Yuan falls on a weak CPI and IPP; US Dollar Rises Despite Investing.com Retail Sales Data

Investing.com – The yuan depreciated against the US dollar on Friday in Asia, after data show China in January and both missed expectations.

The country's consumer price index rose 1.7% in January from the previous year, which is lower than the 1.9% rise recorded in December and below market expectations.

At the same time, the PPI rose 0.1% year-over-year in January, the slowest pace since September 2016 and down from 0, 9% recorded the previous month.

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

The last trading price was 6.7753 at 00:23 (ET) (0523 GMT), up 0.1%.

At the same time, the balance between the greenback and a basket of other currencies also rose 0.1% to 96.893.

The rise in the dollar came even after the US Commerce Department announced Thursday that the United States had fallen for the first time in ten months in December.

CIBC said that a poor reading should not be worrying, as a strong job market will support consumer spending over the next few months.

"Nevertheless, the current data reinforces the Fed's conservative stance for the moment, will weigh on the dollar and cause a fall in yields," the bank added.

The market is now waiting for the evolution of trade negotiations between Washington and Beijing.

The optimistic badessment of US President Donald Trump's talks earlier in the week raised hopes that both parties would still be able to reach an agreement by the March 1 deadline, but headlines released today suggest that an agreement could still be distant.

Citing three American and Chinese officials, Bloomberg said the two countries have made little progress so far during their talks in Beijing this week. According to the report, they failed to narrow the gap between the problems related to structural reforms of the Chinese economy.

Elsewhere, the pair fell 0.2%. Reserve Bank of Australia Governor Christopher Kent said in a speech in Melbourne Friday that he thought the recent weakness of the Australian dollar could be beneficial for the economy.

"Although the exchange rate is still in the relatively narrow range of recent years, the recent depreciation is helpful at the margin as there are still unused capacities in the economy and the economy is not in the market. inflation remains below the target, "he said.