Australian Dollar Trades Higher After China’s CPI Beats Expectations

The Australian dollar rose today after China’s consumer inflation accelerated more than was expected by markets. The market sentiment was still cautious as the Wuhan coronavirus continued to spread across China.
According to data from the National Bureau of Statistics of China, the Consumer Price Index climbed by 5.4% in January, year-on-year. That is compared with the median forecast of a 4.9% increase and a 4.5% gain registered in the prior month. The Producer Price Index rose 0.1% last month from a year ago, matching expectations, after falling 0.5% in the month before. Australia has strong trading ties with China, making China’s macroeconomic reports important for the Australian currency.
Investors remained in a pessimistic mood as the deadly virus continued to spread across China. The number of confirmed cases jumped to 40,171, and the death toll increased to 908. As much as 97 people died on Sunday — the largest death toll registered in a single day since the start of the outbreak. Some analysts voiced a cautious optimism after China eased some restrictions on working and movement, allowing workers to return to offices and factories on Monday. But overall, the mood remained grim.
Going forward, the Aussie will be reacting to reports about the epidemic as well as other news affecting the general market sentiment. There will not be many important economic releases in Australia during this week, though the speech of Reserve Bank of Australia Governor Philip Lowe on Thursday may have a strong impact on the currency.
AUD/USD rose from 0.6667 to 0.6693 as of 11:40 GMT today, reaching the high of 0.7070 intraday. EUR/AUD dropped from 1.6404 to 1.6359. AUD/JPY gained from 73.12 to 73.49.

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Original from: www.earnforex.com