USD/CNH soars above 6.9750 as China prints deflation


Share:
  • USD/CNH has scaled above 6.9750 as the Chinese economy has registered a deflation by 0.5%.
  • Producers have lowered prices of goods and services at factory gates due to sluggish demand.
  • Upbeat US ADP Employment data has confirmed that January’s strong data was not a one-time blip.

The USD/CNH pair has jumped above 6.9750 as China’s National Bureau of Statistics (NBS) has reported a sense of deflation in the Consumer Price Index (CPI) (Feb) data. Monthly CPI figures have contracted by 0.5% while the street was anticipating a decline to 0.2% from the former release of 0.8%. The prices of goods and services in China have accelerated by 1% annually, lower than the consensus of 1.9% and the prior release of 2.1%.

Apart from that, the annual Producer Price Index (PPI) has contracted by 1.4% vs. the consensus of 1.3% contraction and 0.8% contraction in the prior release. This indicates that producers lowered the prices of goods and services at factory gates. The reason behind lowering prices could be sluggish demand. It seems that China’s reopening has failed to propel domestic demand.

A sense of deflation might force the People’s Bank of China (PBoC) and the Chinese administration to inject helicopter money into the economy to support the overall demand.

The US Dollar Index (DXY) is gathering strength as United States President Joe Biden has proposed an increase in corporation taxes from 21% to 28%. US Biden wants a 25% billionaire tax and large levies on rich investors. He has also proposed a tax on income over $400,000 at 39.6% in the budget.

More taxes on US individuals will be considered as contracting Fiscal policy, which might support the Federal Reserve (Fed) in bringing down the stubborn inflation.

Fed chair Jerome Powell has confirmed a higher terminal rate than previously anticipated as the battle against sticky inflation is getting complicated. Also, upbeat US Automatic Data Processing (ADP) Employment data has confirmed that January’s strong data on the labor market and consumer spending was not a one-time blip.

USD/CNH

Overview
Today last price 6.9748
Today Daily Change 0.0072
Today Daily Change % 0.10
Today daily open 6.9676
 
Trends
Daily SMA20 6.8982
Daily SMA50 6.8388
Daily SMA100 6.9772
Daily SMA200 6.9206
 
Levels
Previous Daily High 6.997
Previous Daily Low 6.947
Previous Weekly High 6.9898
Previous Weekly Low 6.8634
Previous Monthly High 6.9898
Previous Monthly Low 6.7056
Daily Fibonacci 38.2% 6.9662
Daily Fibonacci 61.8% 6.978
Daily Pivot Point S1 6.944
Daily Pivot Point S2 6.9206
Daily Pivot Point S3 6.894
Daily Pivot Point R1 6.994
Daily Pivot Point R2 7.0205
Daily Pivot Point R3 7.044

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Editors’ Picks

EUR/USD bounces from 1.0800 in the US afternoon

EUR/USD bounces from 1.0800 in the US afternoon

EUR/USD lost its bullish momentum and declined toward 1.0800 in the second half of the day on Thursday. The upbeat Jobless Claims and February PMI data from the US helps the US Dollar find demand and weighs on the pair.

EUR/USD News

GBP/USD drops below 1.2650 as USD rebounds

GBP/USD drops below 1.2650 as USD rebounds

GBP/USD reversed its direction and declined below 1.2650 after rising above 1.2700 earlier in the day. Renewed US Dollar strength on the back of better-than-forecast Jobless Claims and upbeat PMI data makes it difficult for the pair to keep its footing.

GBP/USD News

Gold challenging the $2,020 mark

Gold challenging the $2,020 mark

Spot Gold eased from a fresh multi-week high of $2,034.86. The US Dollar edged sharply lower during Asian trading hours and remained on the back foot through most of the European session but turned higher ahead of Wall Street’s opening. 

Gold News

XRP price declines with developments in SEC v. Ripple lawsuit

XRP price declines with developments in SEC v. Ripple lawsuit

XRP price dropped below $0.55 on Thursday as both Ripple and SEC work on remedy-related briefs. March 13 is the next key deadline for the SEC v. Ripple lawsuit.  

Read more

Nvidia drives global markets to records, as European stocks defy German economic gloom

Nvidia drives global markets to records, as European stocks defy German economic gloom

Markets are a sea of green after Nvidia’s earnings report has boosted global risk appetite and stock markets surging. Boost to Nvidia’s share price after another monster earnings report and super forecast has led to a collective relief rally across markets.

Read more

Forex MAJORS

Cryptocurrencies

Signatures