AUD/JPY remains confined in a tight range around the 107.00 mark following Chinese macroeconomic data

  • The AUD/JPY fluctuates in a narrow trading band and is influenced by a combination of factors.
  • Intervention fears, bets on a BoJ rate hike and political tensions in the US support the safe-haven JPY.
  • Chinese macroeconomic data does little to impress AUD bulls or provide impetus to the cross.

The AUD/JPY pair struggles for a firm intraday direction on Monday and oscillates between tepid gains and minor losses during the Asian session. Spot prices remain stable around the 107.00 round mark and react little to unimpressive Chinese macroeconomic data.

The National Bureau of Statistics (NBS) reported that China’s economy expanded 4.7% year-on-year in the second quarter of 2024, compared with a 5.3% expansion in the first quarter. On a quarterly basis, China’s economy grew 0.7% in the second quarter of 2024 compared with 1.5% in the previous quarter. Meanwhile, China’s retail sales rose 2.0% year-on-year in June versus 3.1% expected and 3.7% previously, while the country’s industrial production stood at 5.3% year-on-year versus 5.0% estimated and 5.6% in May. Moreover, fixed-asset investment rose 3.9% year-on-year in June versus 3.9% expected and 4.0% previously. However, the data does little to provide any meaningful impetus to the Australian Dollar (AUD), although bets that the Reserve Bank of Australia (RBA) could be raising interest rates again are acting as a tailwind for the AUD/JPY pair.

The Japanese Yen (JPY), on the other hand, is getting some support from rising bets that the Bank of Japan (BoJ) might hike interest rates in response to a weakening domestic currency. Adding to this is speculation that Japanese authorities might intervene in the market to lift the domestic currency, coupled with political tensions in the US following an alleged assassination attempt on former US President Donald Trump, which is lending support to the safe-haven JPY. This, in turn, is holding traders back from placing aggressive directional bets around the AUD/JPY cross and leading to range-bound price action on the first day of a new week. Therefore, it will be prudent to wait for continued strong selling before positioning for an extension of the recent pullback from the highest level since May 1991, around the 109.35 region touched last Thursday.

Economic indicator

Gross Domestic Product (YoY)

The gross domestic product published by the National Bureau of Statistics of China The GDP is a measure of the total value of goods and services produced by China. GDP is considered a broad measure of economic activity and indicates the pace of growth of a country’s economy. Since the Chinese economy influences the global economy, this indicator impacts the foreign exchange market. A high reading is positive or bullish for the CNY, while a lower reading is negative or bearish.



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Source: Fx Street

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