Yuan gains as markets weigh China inflation, await US CPI

Business Recorder reported that the yuan edged higher against the greenback on Wednesday, with the spot rate at 6.6919 by 0304 GMT, 9 pips firmer than the prior late session. Traders weighed mixed domestic inflation readings while the market waited for US CPI figures due later today. The dollar had pulled back from an 18-month peak touched earlier this week, after oil prices fell and investors rethought the AI-powered boom that pulled capital into US holdings.

Chinese producer prices grew at the quickest rate in over four years during September, whereas consumer inflation undershot expectations. Higher oil and commodity costs pushed up factory-gate prices, though soft domestic demand restrained wider price pressures.

Before the market opened, the People's Bank of China set the midpoint at 6.7249 per dollar, its strongest reading since February 2, 2023, and 327 pips softer than a Reuters estimate. Spot trading is permitted within 2% either side of that fixing each day. China Securities analysts expect gradual appreciation through the rest of 2026, with a year-end range of 6.6 to 6.7 per dollar, while OCBC cautioned that consolidation is possible near term.