Australian Dollar Steady on Soft Chinese Industrial Profits Data

Talking Points:

• AUD/USD little-changed after China’s industrial profits data crossed the wires
• Profits fell 4.7% y/y in December following 1.7% y/y decline in November
• China-linked negativity seemingly overshadowed by upbeat Australian CPI data

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The AUD/USD showed a tepid reaction to the soft Chinese industrial profits print. Earnings for the manufacturing sector in China fell 4.7 percent year-over-year in December following a 1.7 percent year-on-year decline in November.

While the Aussie edged slightly lower following the announcement, the move appeared tepid in the context of an earlier rally following upbeat inflation data. That result spoke more directly to RBA monetary policy expectations and appeared to overwhelm the negative implications of Chinese news-flow.