Finport Currency Brief - Courtesy of Compass Global Markets.
The A$US$ had another small dip overnight but only by 1/2% as the market looked to the Bank of Japan's reduction in bond purchases and as reports hit the wires that the Bank of China is "loosening its currency management" - both of which helped the US$ higher.
Looking ahead and our focus is on today's Chinese inflation data that is expected to tick up towards 2% year on year. Should that be the case then the A$ is expected to maintain its current level of support and correct higher as we wait for tomorrows domestic Retail Sales numbers.
Elsewhere A$GBP is grinding lower, away from the highs that have capped for the last 2 months and this move may well gather pace - depending on tonight's UK Manufacturing data. A$Euro has also pulled back slightly on the a-fore mentioned Chinese monetary policy news and simply as the market takes advantage of the highs. I'd expect this pair to hold the range short to medium term.
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