Compared to July, consumer prices rose 0.1%, following a 0.2% increase the prior month. Economists projected a 0.3% month-on-month increase. A separate gauge of factory-gate prices known as the producer price index (PPI) fell 0.8% in the 12 months through August, the smallest decline since 2012. Producer prices have been in deflation for four-and-a-half years, a painful reminder of China’s protracted manufacturing slowdown. The July data released last month, which showed a 1.7% annualized drop in PPI, offered some solace that deflationary pressures were finally beginning to fade. However, analysts have warned that China’s manufacturing sector will continue to suffer from overcapacity over the medium-term.
Aussie is currently being traded around 0.7650 area. Pair is likely to find support around 0.76 and resistance above 0.77 handle.
