Home Forex Chinese yuan rises against U.S. dollar on January data

Chinese yuan rises against U.S. dollar on January data

by Jonathan Adams

The Chinese yuan rose against the U.S. dollar after the release of January’s inflation data, while the U.S. dollar slips ahead of Powell speech

The Chinese yuan rose against the U.S. dollar after the release of January’s inflation data. The USD/CNY pair dropped 0.2% to 6.9875 by 12:41 AM ET (04:41 GMT).

Data on Monday showed China’s producer prices gained 0.1% year-on-year, which was the first pickup since May 2019.

Factory-gate prices were previously expected to rise 0.1% from a year earlier, compared with a 0.5% drop in December.

Consumer prices also gained 5.4% year-on-year compared with an expected 4.9% rise and a 4.5% rise in December.

The coronavirus situation remained in focus as workers in China travelled back to offices and factories around the country after the extended Lunar New Year holiday.

Death toll from the disease has officially overtaken that of the SARS outbreak almost two decades ago, as China reported an additional 89 deaths on Sunday, bringing the total number of deaths in the mainland to 908.

The National Health Commission also said on its website that 2,656 new cases were confirmed as of end Saturday. This brings the total number to 40,171 in mainland China.

Meanwhile, the U.S. dollar index slipped 0.1% to 98.505 ahead of an important testimony from Federal Reserve Chair Jerome Powell this week.

Powell is scheduled to testify before the House Financial Services Committee at 10:00 AM ET on Tuesday. On Wednesday, he will appear in front the Senate Banking Committee, also at 10 AM ET.

On the data front, this week’s U.S. consumer price data is expected to be in focus.

Consumer prices are expected to have risen 0.2% last month, according to estimates, matching the increase seen for December. On a yearly base, CPI is projected to climb 2.5%, up from 2.3% a month earlier.

There are also U.S. retail sales figures for January, which investors will be eyeing for further signs on the strength of the American consumer.

The consensus forecast is that the report will show retail sales rose 0.3% last month, after rising at the same pace in December.

The GBP/USD pair inched up 0.1% to 1.2907. U.K. Prime Minister Boris Johnson said earlier this week that he was unwilling to accept the EU’s request to sign up to its rules in any potential trade deal.

The USD/JPY pair also edged up 0.1% to 109.78.

The AUD/USD pair gained 0.5% to 0.6703.

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