China CPI/PPI preview: What to expect of AUD/USD?

By FXStreet AUD/USD is seen extending its corrective slide from eight-month peaks, and now drops further below 0.75 handle as markets prefer to capitalize the previous rally ahead of the crucial Chinese inflation numbers.

Earlier this week, the awful trade balance data from China weighed down on the Aussie, although the trade data-led downward spike was temporary and the AUD bulls regained momentum and resumed its recent winning streak towards fresh multi-month tops. The trade data evidenced drop in exports by 25.4% in February on YoY terms, which is well below the 12.5% drop forecasted, with the trade surplus narrowed to USD 32.59bn in Feb, from USD 60.61bn reported previously.

Feb CPI seen stabilizing at 1.8% y/y

The Chinese Feb CPI and PPI data will be reported at 01.30GMT, with the consensus forecasts for CPI expecting no growth in the prices last month, leaving the price index unchanged at 1.8% y/y booked in Jan. While the factory gate prices are expected to decline 4.9% y/y, marking the weakest wholesale deflation rate in eight months, following a decline of 5.3% in January.

The CPI data is likely to show that the annual rise in the Chinese consumer prices have remained at five-month highs in Fed, although …read more

Source:: FX Street