China key data preview: what to expect in AUD/USD?

By FXStreet FXStreet (Guatemala) – AUD/USD is lined up for today ahead of the Chinese data, yuan fix (USD/CNY) and stock market’s outcome, all of which give us high potential for fireworks on the major commodity currency. We have retail sales and industrial production for December as well as GDP for Q4.

First of all, the Yuan (USD/CNY) has been stabilizing of late while China ended an eight-day run of reductions on the 7th Jan after the offshore yuan’s recent drop actually put China in breach of IMF regulations, sending panic across markets at the start of the year with escalated fears of a global currency war.

Also at the start of this year, Chinese stocks played havoc across the markets to the extent that the authorities had to scrap the circuit breaker system to try and help to stabilize the market. However, there remains a sense of panic among the retail investor and a flight to safety in bearish sentiment has seen copper and related currencies plummet making China’s data releases high risk events.

AUD/USD started the year with a high of 0.7301 to trade as low as 0.6827. Today has the possibility of seeing a large move in …read more

Source:: FX Street