Australian Dollar, AUD/USD, US CPI, Chinese Yuan New Lending – Talking Points
- Asia-Pacific markets look set to rise after US stocks gain
- China’s new yuan loans could hit the cables today
- AUD/USD probes key Fib level after third daily price gain
Thursday’s Asia-Pacific Outlook
Asia-Pacific markets look set for a higher open this morning, fueled by risky overnight trading on Wall Street, with the Australian dollar rallying overnight against the US dollar. A better than expected set Disney and Uber’s earnings also encouraged investors after the closing bell in New York. AUD/USD hit its highest level since January 21st.
Gold prices rose for a fourth day, helped by a broadly weaker US dollar and lower longer-term Treasury yields. A rise in equilibrium rates also boosted gold’s attractiveness for inflation hedging, with the 2-year BE yield rising above 3.2% ahead of this week’s US inflation report. evening. Analysts see the US CPI gauge rising 7.3% year over year, according to a Bloomberg survey. A warmer-than-expected print could bolster already high bets on the Fed’s rate hike, which could push the greenback higher. It would also likely temper the recent strength seen in equities, both in the US and elsewhere.
Japan this morning released foreign bond investment data for the week ending Feb. 5 at -234.4 billion yen, down from the previous -120.6 billion yen. The Producer Price Index (PPI) for Japan revealed that ex-factory prices rose at an am/m pace of 0.6%, beating consensus analysts’ forecast of 0.4%. South Korea’s trade surplus fell to $6.06 billion in December from $6.82 billion in November.
Today, an interest rate decision from the Reserve Bank of India (RBI) will cross the wires. Analysts see the Indian central bank maintaining its key rate at 4.0%. Australian building permits data for December will see one final update and private home approvals will also hit the news wires. China may release new yuan loan data for January as early as this afternoon. Chinese banks are estimated to have issued 3.69 trillion yuan in new issues, a potential record, as the PBOC tries to stimulate the economy amid a broader slowdown in recent months.
AUD/USD Technical Forecast
AUD/USD broke above the 61.8% Fibonacci retracement before falling slightly overnight. The bulls are likely to probe the level further today, with a higher breakout putting prices higher off the 78.6% Fib and lower 50-day simple moving average. Alternatively, a break down could bring AUD/USD back towards the pseudo 50% Fib level, where prices faced a resistance level 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