The onshore yuan slipped 0.3% at 7.1117 per dollar, while its offshore counterpart declined 0.27% to 7.1142
The dollar recovered some lost ground on Monday while the yen pared its safe-haven gains, as investors who were undecided on the scale of a Fed rate cut expected later this month looked to this week’s U.S. inflation data for more clues.
In China, data showed consumer prices gained in August to the fastest pace in half a year but producer price deflation (PPI) worsened.
The onshore yuan slipped 0.3% at 7.1117 per dollar, while its offshore counterpart declined 0.27% to 7.1142.
The report could continue to perpetuate deflation concerns, according to Saktiandi Supaat, regional head of FX research and strategy at Maybank.
There have been talks of reserve requirement ratio cuts, but given how the earlier easing has had little effect, I think further easing via RRR cuts or interest rate cuts may actually simply result in a weaker yuan, Supaat said.
Currencies elsewhere struggled after Friday’s highly anticipated U.S. jobs data failed to offer clarity to traders on the question of whether the Federal Reserve would deliver a regular 25 bp rate cut or an outsized 50 bp one at its policy meeting next week.
While employment increased less than expected in August, the jobless rate ticked lower and wage growth remained solid, suggesting that the U.S. labour market was cooling, but not at a pace that warranted panic over the economy’s growth outlook.
The yen shed some of its gains after having gained 2.73% last week as risk aversion gripped markets and in the wake of some volatility following the NFP report.
It was down 0.44% at 142.92 per dollar. The market brushed off data from earlier in the session which showed Japan’s economy grew in April-June at a slightly slower pace than initially reported, largely due to downward revisions in corporate and personal spending.
The euro stumbled 0.1% to $1.1075, while sterling skidded 0.08% to $1.3119.
Against a basket of currencies, the dollar rose 0.13% to 101.33.
