AUD/USD shrugs off softer than expected China data
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AUD/USD pares early losses, steadies below 0.6750

  • Consumer Inflation Expectations in Australia dropped to 4% in February.
  • RBA’s Lowe says coronavirus is having an “uncertain impact.”
  • US Dollar Index stays near 99 as focus shifts to CPI data.

The AUD/USD pair came under bearish pressure during the Asian trading hours and slumped to a daily low of 0.6708 before retracing its losses into the American session. As of writing, the pair was trading at 0.6734, down 0.06% on the day.

The data published by the Melbourne Institue on Thursday showed that Consumer Inflation Expectations fell to 4% from 4.7% and came in lower than the analysts’ estimate of 4% to weigh on the AUD. While speaking at the Australia-Canada Economic Leadership Forum, Reserve Bank of Governor Lowe noted that the coronavirus was having an “uncertain impact” on the economy. 

In the meantime, following a change to the counting method, the number of coronavirus infections in China rose sharply and put additional weight on China-proxy AUD’s shoulders.

US Dollar Index stays below 99 ahead of inflation report

In the early American session, the Consumer Price Index (CPI) data will be featured in the US economic docket. The core CPI, which excludes volatile food and energy prices, is expected to edge lower to 2.3% from 2.2% on a yearly basis in January. Ahead of the data, the US Dollar Index is down 0.1% on the day at 98.92, helping the pair stay away from daily lows.

There won’t be any macroeconomic data releases from Australia on Friday and markets will pay close attention to fresh headlines surrounding the coronavirus outbreak.

Technical levels to watch for

 

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