News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Australian Dollar Steady As Chinese Inflation Meets Forecasts

Australian Dollar Steady As Chinese Inflation Meets Forecasts

David Cottle, Analyst

Talking Points

  • Chinese inflation data for June came in just about as markets had expected
  • Consumer prices rose 1.5% Y/Y, with non-food prices leading
  • The Aussie Dollar market clearly had other things on its collective mind

Keep your Asia/Pacific trading strategy in shape with the DailyFX Trading Guide

There was little for Australian Dollar investors to get their teeth into Monday with the release of broadly as-expected inflation numbers out of China.

Consumer prices rose an annualized 1.5% in June, official figures showed. That was exactly the same as May’s print and only just below the forecast 1.6% rise. Food prices slipped back, apparently while non-food prices made modest gains. Producer prices meanwhile rose 5.5%, just as expected. Both indexes fell by 0.2% on the month.

The Australian Dollar can at times act as the financial markets’ favorite liquid China proxy thanks to China’s vast raw-material export links to the world’s second-largest economy. However in recent weeks the Aussie has been more vulnerable to disappointing data out of China than likely to rise on stronger numbers. It didn’t do much at all on the inflation release, with AUD/USD barely moved and stick in the 0.76 area.

The Reserve Bank of Australia surprised some investors last week by refusing to increase the volume of hawkish rhetoric, as some other developed market central banks have done. The record-low, 1.5% Official Cash Rate prevailing in Australia is thought likely to stay put at least until the closing months of 2018. Then it could start to rise, according to the futures market curve.

Australian Dollar Steady As Chinese Inflation Meets Forecasts

--- 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.

DISCLOSURES