Sunday, September 12, 2010
AUD/USD Gaps Up 37 Pips in Early Sunday Trading
The initial 37 pip AUD/USD gap up on the open of Sunday forex trading today seems to be in line with bullish Chinese economic data. Some traders are wary though of a possible rate hike to curb inflation. It remains to be seen how policy makers will react, e.g. if they consider the 3.5% CPI (inflation rate) in August to be somewhat of a one-time outlier due to food inflation caused by floods/crop destruction or if they foresee a greater inflationary trend.
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Sri Jagaraja from CNBC Squawk Asia said most economists felt there would be no rate hike from the PBOC as inflation this time around (August) was caused primarily by food inflation/crop destruction from floods. Seems reasonable.
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