The Australian dollar has grown at today's Asian session due to positive Chinese data. It became known that producer price index of China has increased by 0.1% in September, which was the first rise in index in the past four years. Consumer price index has grown by 0.7%, which was a favourable factor for the Australian dollar because China is the largest trading partner of Australia.
The main items of Australian import to China are raw products: coal, iron ore, liquefied natural gas and agricultural products.
In China, futures for iron ore and coking coal have grown by 0.6% and 1% respectively. These products account for about 30% and 12% of commodity exports from Australia, respectively.
Chinese positive data has strong favourable impact on the stock markets in the Asia-Pacific region. At the end of the Asian, Japanese index Nikkei Stock Average has increased by 0.5%, to 16856.00 points, Australian index S&P/ASX has grown by 0.1%.
The rise in oil prices also has a positive impact on the AUD, as oil and gas sector is one of the most important for the Australian economy.
Today, the pair AUD/USD was also supported by the main cross- pairs, as the Australian dollar is rising in the pairs with the Pound, Euro, Canadian and New Zealand dollars.
It is likely that today’s positive trend in the pair AUD/USD will continue until the beginning of November, when next RBA meeting will be held.
In August, the RBA reduced the interest rate in Australia to the record lows at the level of 1.5% under the pressure of weak inflation data.
Given high GDP growth in Q2, and the decrease in unemployment rate, probability of the further decrease in rate this year is now about 32%.
If inflation data for Q3, which will be released late in October, will be positive, probability of the interest rate decrease in Australia will drop, which will add positive momentum the Australian currency.