Commerzbank: China's Widening PPI-CPI Gap May Weigh on USD
Commerzbank analysts note that China’s June CPI slowed to 1.0% YoY while PPI rose 4.1%, widening the reflation gap and potentially pressuring the US Dollar.
USDCNY
China’s June inflation data showed consumer prices rising just 1.0% year-on-year, while producer prices accelerated to 4.1% YoY, according to official figures.
Commerzbank analysts highlight that the widening gap between PPI and CPI—the so-called reflation gap—is squeezing downstream profit margins. This imbalance, they argue, works against the US Dollar in currency markets.
The dynamics could influence the USDCNY pair as markets weigh the impact of divergent inflation trends on relative monetary policy and trade flows.
Source: FXStreet Forex News