AUD/USD ignores Australia's housing, NAB data as traders await China inflation
|- AUD/USD extends losses for the second day despite recently positive Australian data.
- Australia’s Q3 House Price Index and NAB Business Conditions came in better whereas NAB Business Confidence matched the downbeat forecast.
- Trade headlines, China’s inflation data and RBA’s Bullock in the spotlight for now.
AUD/USD stays modestly changed to 0.6825 during the Asian session on Tuesday. The Aussie pair shows no major reaction to Australia’s housing and business data.
Australia’s House Price Index data for the third quarter (Q3) beat a 0.2% forecast to 2.4% on QoQ while also recovering to -3.7% from -7.4% prior on YoY. Further, National Australia Bank's (NAB) Business Confidence matched the consensus figure of 0 while the NAB’s Business Conditions rose past-2 forecast to 4. Even so, the Aussie pair showed no major response as traders await inflation data from the key customer China.
Read: Australia data dump: Aussie holds steady despite positive data
Recently released second-tier sentiment data for Australia, ANZ-Roy Morgan Consumer Confidence, came in better than 108.10 to 109.00 for the last week. Also, the comments from the Reserve Bank of Australia (RBA) Governor Philip Lowe, from the AusPayNet Summit in Sydney, showed the central banker’s confidence in the consumer spending and bank’s forecast about the Gross Domestic Product (GDP).
Be it the USMCA (United States–Mexico–Canada Agreement) or phase-one, trade headlines have been mixed off-late. While the Trump administration diplomats will fly to Mexico for the final deal, the US-China still struggles to strike the right chord ahead of December 15 deadline of the US tariffs on Chinese goods. Some in the US, including Agriculture Secretary Sonny Perdue, turned down the fear of tariffs but China’s Global Times portrays the risk on cards.
Moving on, China’s headlines inflation data for November, namely the Consumer Price Index (CPI) and Producer Price Index (PPI) will be in focus for now. Following that, comments from the RBA’s Deputy Governor Michele Bullock will gain market attention. Meanwhile, trade/political headlines can keep entertaining the markets.
About the China data, TD Securities said, “China CPI rose to 3.8% y/y in October, its highest reading this year, due predominantly to a 101.3% y/y increase in pork prices. In contrast, ex-food CPI matched its lowest since October 15, suggesting that underlying price pressures remain benign. While the impact of African Swine Disease is likely to continue to exert upward pressure on headline CPI, this is likely to fade in the months ahead. Even so, we estimate that CPI rose further in November, to 4.4% y/y.”
Technical Analysis
100-day Simple Moving Average (SMA), around 0.6810 now, acts as immediate key support ahead of November lows near 0.6755. On the contrary, buyers will look for entry beyond the monthly top near 0.6865 to target 200-day SMA around 0.6915.
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