By: Barbara Zigah
Better than expected inflation data from China has helped pull the common currency Euro up out of its recent decline. Other commodity-linked currencies, such as the Australia Dollar, also benefited from the news. As reported at 12:17 p.m. (JST) in Tokyo, the Euro traded higher against the U.S. Dollar, priced at $1.4418 and off a session low of $1.43782 struck on the EBS trading platform. Against the Swiss Franc, the Euro traded at 1.2057 Swiss Francs, off from 1.2012 Swiss Francs, a session low struck earlier. The Australian Dollar was seen as one of the day’s best performers, up 0.2% against the U.S. Dollar, to trade at $1.0628.
Chinese data shows that besides better than expected consumer price data, retail sales and industrial production also posted solid growth. The Consumer Price Index accelerated to 5.5% annualized last month, the quickest pace in almost three years. This is likely to come as a relief to market players, who had been expecting the Chinese central bank to tighten monetary further.
Market attention will turn their focus to the United States, with retail sales data being released later today and a key to whether or not the economic slowdown there is affecting household spending. Consumer spending is key to the U.S. economic recovery, as consumers represent more than 60% of GDP.