Chinese Numbers Jump Start The Aussie
Skerdian Meta • 1 min read
Last night, I checked the forex chart for the last time before going to bed and I saw that the AUD pairs had jumped about 40-50 pips from the lows in the evening.
There was no economic data from Australia on the schedule. As a result, there was only one option left (unless the Aussies discovered a massive oil field). It was the Chinese.
We know of the close relation between the Chinese and the Australian economies. All the raw material that Aussies dig out of their massive land goes straight to China to fuel its economy.
Looking at the economic calendar now, I see that inflation is picking up in China on both fronts. In the last few months, we have only seen the PPI (consumer price index) move higher, while the CPI (producer price index) has been all over the place.
Australia, or AUD traders, really care about the PPI number since Chinese imports are Australian exports.The higher Chinese import prices, the higher their export prices and revenue.
Nonetheless, CPI is the most important number for an economy since it portrays inflation better. So, the Chinese CPI jumped by 4 points while PPI jumped by a staggering 1.4%.
That´s more than enough of a reason for the AUD bulls to get their walking boots on. That´s what they did last night and today the Australian Dollar seems like the safest bet among forex majors. We´ll keep that in mind today when looking for short term opportunities.