Aussie Drops Despite Positive Inflation Data in China

The Australian dollar was soft today despite positive macroeconomic data in China, Australia’s biggest trading partner. Domestic data was not particularly good, but was not that bad either, certainly not enough to hurt the currency significantly. Today’s drop was not nearly enough to erase yesterday’s big rally, though, and the Aussie remains one of the strongest currencies for the week.
China’s consumer price inflation accelerated to 2.3% in March from 1.5% in the previous month. The producer price inflation accelerated to 0.4% from 0.1%. Both indicators matched forecasts exactly.
The Melbourne Institute Survey of Consumer Inflationary Expectations showed that the expected inflation rate in Australia fell from 4.1% to 3.9% in April.
AUD/USD dropped from 0.7171 to 0.7141 as of 13:05 GMT today. EUR/AUD gained from 1.5719 to 1.5768. AUD/JPY slipped from 79.60 to 79.50.

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