The Australian dollar was trading lower in Monday’s trading on the back of weaker than expected data out of China.
On a monthly basis the consumer price index out of China slumped -0.4 percent against analysts’ expectations for a -0.3 percent drop while the yearly figure hit the market at 2.3 percent, unchanged from last month and against predictions for a 2.5 percent rise .
Angus Nicholson, market strategist at IG noted that the figures can cause a headache as a jump in food prices may hamper their plans to further ease monetary policy,
"Food prices jumped 7.3 percent on-year in February, yet core CPI and non-food CPI both eased. This potentially creates a headache for China's central bank as further monetary policy easing is clearly necessary, but out of control food price inflation could restrain their ability to ease as much as is necessary," Nicholson said .
Trade figures out of China tomorrow as well as gross domestic product figures on Friday will be closely watched for any signs of further weakness in the Chinese economy and disappointing figures are likely to weigh on the Australian dollar
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