The Australian dollar dropped against the greenback after the Chinese GDP and Consumer price index, where China’s showed strong economic growth during the first quarter of the year along with higher inflation rates, adding to fear of further monetary tightening which will slow growth in Australia’s biggest trading partner.
Chinais largest market for Australian products, so the recent Chinese data has a negative impact on Australian exports, as the world’s second largest economy crack new measures to curb inflation.
Still expectations indicate the Australian commodities will retreat in the next two years, which has a negative impact on the nation’s currency.
We can see that the Reserve Bank of Australia won’t increase borrowing costs during the coming meeting, as inflation expectations declined to 3.5% in March, from 3.6% in February.
On Monday, Australian economy fundamentals will be absent on but the U.S. economy will issue NAHB housing market index for April at 14:00 GMT, and is expected to come at 17 the same as previous reading.
Originally posted here
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