AUD/USD is approximately 0.6300 as contracts in the consumer price index in China in February
- AUD/USD edges are less than about 0.6305 in the early Asian session on Monday.
- The Chinese consumer price index has fallen into negative lands for the first time since January last year.
- Non -agricultural salaries in the United States increased by 151,000 in February, compared to 160,000 expected.
AUD/USD pair weakens approximately 0.6305 during the early Asian session on Monday. The disappointing Chinese economic data weighs during the weekend on the Australian dollar in China (AUD). However, concerns about the slowdown on the horizon in the American economy may help reduce the loss of the husband.
Data issued by the National Bureau of Statistics on Sunday showed that the Consumer Prices Index in China (CPI) fell 0.7 % on an annual basis in February, compared to 0.5 % growth in January. This figure came in a softening of the estimate of a decrease of 0.5 %. On a monthly basis, inflation in the Chinese consumer price index came by -0.2 % in February compared to 0.7 % in January, which is softer than -0.1 %.
Meanwhile, the country’s product price index (PPI) decreased by 2.2 % on an annual basis in February, after a decrease of 2.3 % in January. The data came less than the market consensus by -2.1 %. Dispondence pressure continues in the second largest economy in the world, which exerts some pressure pressure on the Australian.
On the other hand, the caution may support the Australian Reserve Bank (RBA) against the US dollar (USD). RBA has warned against reducing the standard interest rate more, and the decision to reduce its rate in February does not mean that the central bank is committed to reducing again in the upcoming meetings, and showed the RBA meeting minutes held on February 17 and 18.
On Friday, the US Office (BLS) showed that non -agricultural salaries in the United States (NFP) rose by 151,000 in February, followed by an increase of 125,000 (revised from 143,000) in January. This number came weaker than the market expectation of 160,000. The more expected job growth in the United States can undermine the green back and act as the back wind of Aud/USD.
Questions and answers in Australian dollars
One of the most important factors for the Australian dollar (AUD) is the level of interest rates set by the Australian Reserve Bank (RBA). Since Australia is a resource -rich country, the other main engine is the largest export price, iron ore. The health of the Chinese economy, the largest commercial partner, is a factor, as well as inflation in Australia, the rate of growth and commercial balance. Market morale-whether investors are eating more risky assets (risk) or searching for safe materials (risk)-is also a worker, with positive risks for AUD.
The Australian Reserve Bank (RBA) affects the Australian dollar (AUD) by determining the level of interest rates that Australian banks can persuade each other. This affects the level of interest rates in the economy as a whole. The main goal of RBA is to maintain a stable inflation rate of 2-3 % by setting interest rates up or down. Relatively high interest rates are supported compared to other main central banks, and relatively low vice versa. RBA can also use and tighten quantitative dilution to influence credit conditions, with previous AUD negative and positive to AUD.
China is the largest commercial partner in Australia, so the health of the Chinese economy is a major impact on the value of the Australian dollar (AUD). When the Chinese economy does a good job, it buys more raw materials, commodities and services from Australia, raising the demand for AUD, and raising its value. The opposite is the case when the Chinese economy does not grow at the speed available. Positive or negative surprises in Chinese growth data, therefore, they often have a direct impact on the Australian dollar and its wives.
Iron Ore is the largest export in Australia, as it represents 118 billion dollars annually according to data from 2021, with China as its main destination. Therefore, the price of iron ore can be an engine for the Australian dollar. In general, if the price of iron ore rises, the AUD also rises, as the total demand for the currency increases. The opposite is the case if the price of iron ore decreases. Iron ore prices also tend to increase the possibility of a positive commercial balance for Australia, which is also positive for AUD.
The commercial balance, which is the difference between what a country gains from its exports in exchange for what it pays to its imports is another factor that can affect the value of the Australian dollar. If Australia produces very required after exports, its currency will obtain a value of the excess demand created from foreign buyers who seek to buy its exports in exchange for what it spends to buy imports. Therefore, the positive net trade balance enhances AUD, with the opposite effect if the trade balance is negative.
