SHANGHAI: China’s yuan held steady against the US dollar on Monday after stronger-than-expected Chinese inflation data, with investors still wary about deflationary pressure and looking for further stimulus measures from Beijing.
Consumer prices rose in February for the first time in six months and exceeded economists’ forecast, official data showed on Saturday, lifted by spending linked to the Lunar New Year holiday.
Factory-gate prices continued their year-and-a-half downward trend, however, and analysts said it was too early to dismiss the threat of deflation.
The Consumer Price Index’s (CPI) 0.7% year-on-year rise reflected in part the shift in the date of the week-long New Year holiday, and markets should not make big calls on such distorted readings, said Ting Lu, chief China economist at Nomura.
The trade-weighted CFETS yuan index against a basket of currencies fell on Monday to 98.62, the lowest since Jan. 17, according to Reuters estimates based on official data.
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