With consumer and producers’ prices failing together of the first time since 2020, China is now fighting the threat of deflation. The official Consumer Price Index (CPI) fell 0.3% last month from the same period last year, in what are worrying signs for the world’s second-largest economy.

While the worlds major economies have been battling inflation since the reopening of their respective markets due to the Covid-19 Pandemic, China has been battling the opposite with increasing local government debt, youth unemployment and challenges in the house marketing.

“As you can see from our data, since the reopening of its economy the Chinese yuan Spot Rate (CNY=TDS) has slowly crept towards 7.3 and although doubts grow about the strength of its ability to recover, there is hope that a weaker CNY currency can help China’s export performance.” Saracen Fletcher, Product Specialist – APAC.

CNY Spot Graph