10.12.202503:52:15UTC+00Offshore Yuan Holds Gains

The offshore yuan maintained its strength, trading around 7.06 per dollar on Wednesday, as rising consumer inflation tempered the prospects for further monetary policy support. In November 2025, China's consumer prices rose by 0.7% year-on-year, marking the highest level since February 2024. Earlier in the week, the Politburo committed to boosting domestic demand and supporting the broader economy in 2026, although they indicated a cautious stance towards stimulus measures. Meanwhile, producer deflation unexpectedly deepened to 2.2% in November, marking the 38th consecutive month of declining producer prices. Beijing has pledged to tackle what it identifies as "disorderly" price competition, though progress has been slow amid concerns that stronger regulatory actions might lead to job losses or further strain the already fragile growth. Attention is now focused on the forthcoming Central Economic Work Conference, where officials are expected to set growth targets for the coming year and outline policy priorities that will steer China's economic strategy for 2026.