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Forex Today: China Going into Deflation?

By Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.

Fears are growing that China is beginning to experience deflation, with its month-on-month inflation data released a few hours showing annualized deflation of 0.3%.

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  1. Chinese CPI (inflation) data released earlier showed Chinese inflation has become deflation, with an annualized contraction of 0.3%, although a deeper contraction of 0.4% was expected. This may increase nerves about a souring of global risk appetite and demand, with markets already in a jittery mood.
  2. The US Dollar lacks a convincing long-term trend and currently seems stuck between support at 101.56, and resistance close by at 102.375. The resistance level held effectively a few hours ago, and the US Dollar is now gently falling.
  3. Global stock markets are generally lower over the past dayThe HSI and the Nikkei 225 Index are both closing lower today.
  4. WTI Crude Oil is looking more bullish after the price made a strong rebound yesterday to close very near its recent 4-month high price. Trend traders might find it interesting to be involved here on the long side.  
  5. In the Forex market, the US Dollar has been the weakest major currency since the Tokyo open, with the Australian Dollar the strongest, putting the AUD/USD currency pair into focus. However, the movements are quite small, and not very significant even on an intraday basis.
  6. New Zealand inflation expectations data came in at 2.83%..
  7. It may be a quiet day in the market today as there are no high-impact data releases scheduled today.
Adam Lemon
About Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.

 

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