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Chinese statistics prevented the Aussie from rising

10.11.2015
The Australian dollar would have continued to strengthen with support from its statistical data, but this was prevented by the Chinese statistics.

On Tuesday afternoon, the AUD/USD pair is trading around the level of 0.7050. The increase compared with the previous trading day is minor, although the Australian macroeconomic calendar gave the instrument a reason for continuing to strengthen. However, in the morning, Chinese statistics came out at the same time as the Australian statistics - and they are not very positive.

The consumer price index in China increased by 1.3% in October y/y vs an increase of 1.6% in September and an expectation of growth by 1.5%. M/m prices have slipped by 0.3% despite the fact that in September they rose by 0.1%.

Inflation perfectly illustrates the changes in the consumer interest. Demand for goods and services is weak, despite efforts by the PBOC to stimulate the banking sector. The components of the inflation report shows that the price of food significantly reduced. This is a strong signal, and it may be carry a long-term fundamental character.

China's producer price index, in turn, last month went down by 5.9% y/y, unchanged compared with September figures. The forecast assumed a slight improvement of the indicator to -5.8%.

Australia published data this morning, according to which the index of business confidence from NAB for October fell 2 points with 5 points before. With this, business conditions kept the previous figure of 9 points. Apparently, the sentiment of entrepreneurs and business people are the result of the fall of trade with China and Europe, so their decline is not surprising.
 
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