Australian Dollar, AUD/USD, US CPI, Chinese New Yuan Loans- Talking Points
- Asia-Pacific markets look primed to rise after US stocks gain
- China’s new Yuan loans may hit the wires as early as today
- AUD/USD is probing a key Fib level after third daily price gain
Thursday’s Asia-Pacific Outlook
Asia-Pacific markets look primed for a higher open this morning, fueled by risk-on trading overnight on Wall Street, with the Australian Dollar rallying through the night versus the US Dollar. A better-than-expected set of earnings from Disney and Uber also encouraged investors after the closing bell in New York. AUD/USD rose to its highest level since January 21.
Gold prices rose for a fourth day, aided by a broadly weaker US Dollar and a drop in longer-dated Treasury yields. A rise in breakeven rates also boosted gold’s inflation-hedging appeal, with the 2-year BE rate rising back above 3.2% ahead of tonight’s US inflation report. Analysts see the US CPI gauge rising at 7.3% year-over-year, according to a Bloomberg survey. A hotter-than-expected print could bolster already lofty Fed rate hike bets, which could push the Greenback higher. That would likely also temper the recent strength seen across equities, both in the United States and elsewhere.
Japan reported foreign bond investment data for the week ending February 05 this morning at -234.4 billion yen, down from the prior -120.6 billion yen reading. The producer price index (PPI) for Japan revealed factory-gate prices rose at a m/m pace of 0.6%, beating the 0.4% consensus analysts’ forecast. South Korea’s trade surplus fell to $6.06 billion in December, down from November’s $6.82 billion figure.
Today will see an interest rate decision from the Reserve Bank of India (RBI) cross the wires. Analysts see India’s central bank holding its benchmark rate steady at 4.0%. Australian building permits data for December will see a final update and private house approvals will also drop on the newswires. China may release data on new Yuan loans for January as early as this afternoon. Chinese banks are estimated to have issued 3.69 trillion Yuan in new issuances, a would-be record high, as the PBOC attempts to boost the economy amid a broader slowdown in recent months.
AUD/USD Technical Forecast
AUD/USD broke above the 61.8% Fibonacci retracement before pulling back slightly overnight. Bulls will likely probe the level further today, with a break higher putting prices up against the 78.6% Fib and the falling 50-day Simple Moving Average. Alternatively, a break lower could put AUD/USD back toward the pseudo 50% Fib level, where prices faced a level of resistance last week.
AUD/USD Daily Chart
Chart created with TradingView
— Written by Thomas Westwater, Analyst for DailyFX.com
To contact Thomas, use the comments section below or @FxWestwater on Twitter