Home Forex Australian dollar rebounds from a decade low amid positive Chinese CPI data

Australian dollar rebounds from a decade low amid positive Chinese CPI data

by Jonathan Adams
australia dollar

Asian equities traded with mild losses while the traditional safe-haven gold reversed gains

The Chinese factories and offices returned to work on Monday, as the country continued to battle the coronavirus epidemic, with the death toll surpassing the 900 figure as well as that of SARS’.

The market mood was largely sombre, barring a brief lift following a big beat on the Chinese CPI data.

The Asian equities traded with mild losses while the traditional safe-haven gold drew bids and traded around $1575 region.

Across the G10 fx board, the Australian dollar staged a solid comeback from a new decade low near 0.6660, having benefited from positive Chinese inflation figures. The AUD/USD pair jumped above 0.6700, dragging the Kiwi higher above the 0.64 handle.

The anti-risk yen traded on the back foot, as USD/JPY tracked the strength in the Treasury yields and S&P 500 futures. The increased Bank of Japan (BOJ) bond-buying and shrinking Japan’s Current Account surplus likely weighed on the local currency.

Meanwhile, the USD/CAD pair fell below the 1.3300 level amid a tepid recovery seen in oil prices and weaker US dollar across its main competitors, as the buck corrected the US NFP data-backed gains.

The EUR/USD pair attempted a bounce above 1.0950 but the further downside still remained in play.

The UK-US post-Brexit trade deal optimism drove the cable back on the 1.29 handle.

There has been a quiet start to a busy week ahead, in terms of the economic data releases, as Monday’s EUR calendar sees the only Eurozone Feb Sentix Investor Confidence gauge of note. The data will drop in at 0900 GMT. The Chinese credit growth data could draw some attention, in the wake of growing coronavirus risks.

The NA session offers the speech by the Fed official Bowman at 1315 GMT alongside the release of the Canadian Housing Starts data. Meanwhile, the Canadian Building Permits data will drop in at 1430 GMT.

The coronavirus-related updates will continue to keep the investors on the edge, as post-Brexit trade talks will also remain in the focus.

EUR/USD has registered its longest daily losing streak since November. The single currency is likely to remain under pressure with the virus scare continuing to dominate the market sentiment. Focus on Eurozone’s Sentix Investor Confidence (Feb) due at 09:00 GMT.

GBP/USD seesaws around 1.2900 while heading into the London open on Monday. While broad US dollar strength has been weighing on the pair off-late, expectations of a hard Brexit recently disappointed the Cable traders.

Gold has surrendered gains seen in early Asia and could revisit the Feb. 5 low of $1,548 during the week ahead. The safe-haven metal may continue to lose ground, as early signs of bearish reversal have emerged on the weekly chart.

This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Related News

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Know more