- AUD/JPY trades at 76.46 versus 76.11 in early Asia.
- China's factory-gate deflation eased in August but fails to draw bids for the AUD.
- Risk-off looks to be capping the upside in the AUD/JPY pair.
AUD/JPY is struggling to draw bids despite signs of easing in factory-gate deflation in China.
The data released at 01:30 GMT showed China's Producer Price Index or factory-gate inflation fell 2% year-on-year in August, as expected, following July's 2.4% decline.
The Consumer Price Index rose 0.4% month-on-month in August as expected versus July's 0.6% rise. In annualized terms, consumer inflation rose 2.4%.
Fresh evidence of a slowdown in decline in factory-gate prices is good news for the Aussie dollar and other commodity-linked currencies. So far, however, AUD/JPY has had a tough time extending the pre-data recovery from 76.11 to 76.47.
The risk-off action in the global equities could be capping the upside in the AUD/JPY pair. The US stocks fell by over 2% on Tuesday, and the futures tied to the major European equity indices are currently reporting moderate losses.
Further, negative news on the coronavirus vaccine front and Sino-US tensions could be playing spoilsport. As per the latest reports, AstraZeneca's COVID-19 vaccine trial has been paused due to an adverse reaction in a person and the US is considering banning some or all products made with cotton from China’s Xinjiang province.
Looking ahead, the buying interest around the AUD would strengthen if the risk sentiment strengthens – more so, as the data released early Wednesday showed Australia's consumer confidence surged in August. The Westpac-Melbourne Institute index of consumer sentiment jumped 18% in September from August's 9.5% drop.
Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD holds above 0.6500 in thin trading
The Australian Dollar managed to recover ground against its American rival after AUD/USD fell to 0.6484. The upbeat tone of Wall Street underpinned the Aussie despite broad US Dollar strength and tepid Australian data.
EUR/USD comfortable below 1.0800 lower lows at sight
The EUR/USD pair lost ground on Thursday and settled near a fresh March low of 1.0774. Strong US data and hawkish Fed speakers comments lead the way ahead of the release of the US PCE Price Index on Friday.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
Google starts indexing Bitcoin addresses
Bitcoin address data is live on Google search results after users realized on Thursday that the tech giant started indexing Bitcoin blockchain data. However, mixed reactions have followed the tech giant's reversed stance on the cryptocurrency.
A Hollywood ending for fourth quarter GDP
The latest revisions put Q4 GDP at 3.4%, the second fastest quarterly growth rate in two years. Much of the upside was attributable to stronger consumer spending, yet fresh profits data affirmed it was a good quarter for the bottom line as well with profits up by the most since the Q2-2022.