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Thursday's Asian session will feature China's latest consumer price index (CPI) and producer price index (PPI) for the month of March at 01:30 GMT.
Overview of the CPI / PPI in China
The annualized index of China is expected to increase 1.5% to 2.4%, the one-year PPI rising from 0.1% to 0.4%. On a monthly basis, the consumer price index is expected to fall from 1.0% to -0.2% in March. Recent Chinese data improvements and a likely trade agreement between the US and China could benefit from additional support to strengthen the Australian dollar if aggregate inflation data did the same.
Barclays and Westpac had their own forecasts spread before publication. While Barclays expects a slight rise in overall inflation, Westpac expects price pressures to remain under control.
How could this affect the AUD / USD?
The latest positive trend in Australian and Chinese data, combined with developments in the US-China trade negotiations, praises the Australian dollar (AUD). The economic strength of its biggest consumer can strengthen the AUD, also called Aussie.
It should also be noted that Australian consumer inflation expectations for April, which are expected to be released on Thursday at 01:00 GMT, may also affect movements in the AUD / USD pair. The last reading was 4.1%. However, the market will focus mainly on Chinese inflation figures, with the country of dragons being Australia's largest consumer.
In the event of a rise in global inflation figures, the AUD / USD pair could further progress to 0.7200 confluence of resistance, including a simple 200-day moving average and a bearish trend line stretched since June 2018. It should also noted that the successful breakout of the 0.7200 pair allowed him to challenge 0.7235 while aiming for resistance at 0.7310.
In contrast, weak data can trace the citation to a 100-day AMS level of 0.7145, before highlighting the levels of 0.7130 and 0.7110 including 50-day AMSs.
Key notes
The AUD / USD remains at several-week highs above 0.7150 after minutes FOMC
AUD / USD Analysis: Possibility of extending its lead to the price zone 0.7240 / 50
About the CPI in China
The consumer price index is published by the National Bureau of Statistics of China. It is a measure of retail price changes in a representative basket of goods and services. The result is a comprehensive summary of the results from the Urban Consumer Price Index and the Consumer Price Index for Rural Areas. The purchasing power of the CNY is dampened by inflation. The CPI is a key indicator for measuring inflation and the trend in the trend of purchases. A substantial increase in the consumer price index would indicate that inflation has become a destabilizing factor in the economy, potentially creating a risk for the People's Bank of China to tighten its monetary and fiscal policy risks. In general, a high reading is considered positive (or bullish) for the CNY, while a low reading is considered negative (or bearish) for the CNY.
About China IPP
The producer price index published by the National Bureau of Statistics of China is a measure of the inflation rate recorded by the producers. It reports average price changes for Chinese commodity producers at all stages of processing (raw materials, intermediate materials and finished products). Changes in the PPI are widely viewed as an indicator of commodity inflation. If the increase in the producer price index is excessive, it would indicate that inflation has become a destabilizing factor in the economy. The People's Bank of China would tighten the risks of monetary policy and fiscal policy. In general, a high reading is considered positive (or bullish) for the CNY, while a low reading is considered negative (or bearish) for the CNY.
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