Brown Brothers Harriman reports that the Chinese yuan is extending its uptrend against the US dollar, with USD/CNH drifting to its weakest level since January 2023. This comes as China's August Consumer Price Index rose modestly, keeping overall inflation subdued. The muted inflation data supports the yuan's strength, as it reduces pressure on the People's Bank of China to tighten policy. Elias Haddad of BBH notes that the currency's uptrend remains intact amid these conditions.
Muted Chinese inflation reduces PBOC tightening pressure, supporting yuan strength against USD.
