Chinese consumer price inflation likely to have accelerated in January

Chinese consumer price inflation and producer price inflation data for the month of January is set to be released this week. According to a DBS research report, China’s headline inflation is expected to have risen 1.5 percent year-on-year, while the producer prices are expected to have risen 4.2 percent.

Food inflation is expected to have stayed on a downtrend, thanks to weak pork prices, given increasing supply. Moreover, the price of corn, recorded three quarterly year-on-year decreases in 2017. On production price, PPI inflation might have decelerating more from high base effects.

Meanwhile, Chinese exports and imports are expected to have grown in the month. According to DBS Bank, exports are expected to have 13 percent, whereas imports are likely to have grown 10 percent, respectively. Demand for export is likely to continue to advance from a synchronized global rebound while double-digit import growth is expected amidst stable domestic demand. The trade balance is likely to have risen from USD 54.7 billion in December to USD 59.2 billion in January, added DBS Bank.

At 17:00 GMT the FxWirePro's Hourly Strength Index of Chinese Yuan was highly bearish -120.155, while the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 120.326. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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