The offshore yuan held its gain around 7.06 per dollar on Wednesday, as elevated consumer inflation tempered expectations of further monetary policy support. China’s consumer prices increased 0.7% year-on-year in November 2025, marking the highest reading since February 2024. Earlier this week, the Politburo pledged to expand domestic demand and support the broader economy in 2026, albeit signaling a cautious approach to stimulus. Meanwhile, producer deflation unexpectedly worsened to 2.2% in November, marking the 38th straight month of falling producer prices. Beijing has vowed to curb what it describes as “disorderly” price competition, but progress has been slow amid fears that stronger regulatory action could lead to job losses or threaten already fragile growth. Market attention now turns to the upcoming Central Economic Work Conference, where officials are expected to set next year’s growth targets and outline the policy priorities that will guide China’s economic agenda in 2026.
