Australian Dollar Unmoved By As-Forecast Chinese Inflation Data
- Chinese inflation data came in broadly as expected for May
- Food prices continue to fall, while non-food items’ prices are rising
- Simultaneous number showed a fall in Australian home loans
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An Australian Dollar market focused like all others on the UK general election Friday failed to move far on news of broadly in-line Chinese inflation data.
The official Consumer Price Index rose 1.5% on the year in May, exactly as forecast. Producer prices, meanwhile gained 5.5%, a shade lower than the 5.7% expected. On the CPI front, food prices reportedly continue to slide, but non-food costs are still posting steady rises. Rises in the price of industrial commodities had supported producer prices, but that process seems to be loosening its grip a little.
The Australian Dollar has in recent weeks been vulnerable to weaker Chinese data, but has seemed less eager to gain on any stronger or as-forecast news out of the world’s second largest economy.
Data released from Australia at the same time showed that home loans fell 1.9% in April, rather worse than the 1% fall expected.
However, with the UK election now thought unlikely to produce an overall majority for any party, it’s safe to say that investors’ minds were elsewhere.
The Australian Dollar has risen this week, largely thanks to official domestic growth data which managed to buck what had been increasingly gloomy expectations.
Still, no alteration is expected to the Reserve Bank of Australia’s record-low interest rates this year and, possibly well into next.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.