On soft China CPI and PPI figures, the AUD/USD whipsaws towards multi-day lows before renewing the annual low.
China’s CPI fell to 1.1 percent year on year, while the PPI met the 8.8 percent anticipated for June.
Concerns about the DXY’s recovery are weighing on stock futures.
Qualitative triggers are still the most significant, and viral updates are crucial for near-term direction.
The headline inflation numbers from China provided another another reason for AUD/USD bears to target the 0.7400 level on Friday morning. Despite the fact that the quote moved less in response to the data, it fell 0.23 percent to 0.7410 by press time. The Aussie pair so re-establishes its yearly low.
China’s headline Consumer Price Index (CPI) falls below 1.3 percent YoY to 1.1 percent, while the Producer Price Index (PPI) confirms that the gloomy estimates of 8.8 percent versus 9.1 percent in prior readings were correct.
Read more: Chinese CPI and PPI fall, yet the AUD remains stable
Apart from the recent frenzy over the key customer’s negative inflation numbers, the coronavirus (COVID-19) variant difficulties are an additional, and equally important, load on the AUD/USD values.
Australian Prime Minister Scott Morrison reversed his position on the AstraZeneca vaccination and encouraged people to get their vaccines early at Pfizer. However, on July 8, Australia’s covid infections reached a three-day high, prompting authorities to rule out unlocking anytime soon. The Premier of New South Wales (NSW) has stated that the Australian state will tighten lockdown and that an opening by next Friday is unlikely. “NSW is facing the largest challenge we’ve encountered since the pandemic began,” Gladys Berejiklian added.
Unfortunately, the virus cases in the United Kingdom have risen to a six-month high, while the numbers in Indonesia, South Korea, and Thailand remain gloomy.
The gloomy truth of the variant’s vaccine resistance and capacity to spread faster adds to the market’s fears of such developments, pushing the US dollar to a safe-haven bid.
It’s worth mentioning that, according to Reuters, China’s Commerce Minister expects “retail sales to expand by an average of 5% each year in the 14th five-year plan period, from 2021 to 2025, and trade in goods to grow by 2% per year.”
S&P 500 futures are down 0.2 percent, while the 10-year Treasury yield is up 2.6 basis points (bps) at 1.31 percent as of press time.
AUD/USD traders will keep an eye on the covid updates for fresh momentum, despite a light calendar elsewhere, after seeing the early reaction to China data.
The AUD/USD seesaws at the September 2020 high amid oversold RSI conditions, which could limit the pair’s further down to 0.7345-40 horizontal support, which has been in place since late September. It should be noted, however, that the corrective bounce may receive less praise until it crosses the 200-DMA mark at 0.7580./n
