LONDON, Aug 9 (Reuters) - The dollar eased on Wednesday after data showed the Chinese economy slipped into deflation last month, which upped the chances for the government to roll out extra stimulus measures and nudged investors into risk assets.
Dollar selling by state-owned Chinese banks helped the yuan rally from a one-month low, dealers said.
The Chinese central bank's stronger-than-expected exchange-rate fixing at 7.1588 per dollar before the open signalled its discomfort with the yuan's recent declines.
The dollar index - which measures the performance of the U.S. currency against six others - eased 0.1%, paring some of Tuesday's 0.47% rise.
"Chinese inflation data showed that consumer prices have barely moved in July, confirming that the world’s second-largest economy is stalling and may be moving into deflation," he said.
Persons:
There's, Ray Attrill, Ricardo Evangelista, Chris Scicluna, Patrick Harker, Raphael Bostic, Michelle Bowman, Kevin Buckland, Brigid Riley, Simon Cameron, Moore, Kirsten Donovan
Organizations:
National Australia Bank, Federal Reserve, Daiwa Capital, ECB, Bank of England, Philadelphia Fed, Atlanta Fed, Fed, Thomson
Locations:
China, Tokyo