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Aussie Gains After China Prices Data, GBP/USD Shows Strength

2/9/2018, 9:58:09 AMMarket Analysis
Aussie Gains After China Prices Data, GBP/USD Shows Strength

The Aussie gained on Friday as consumer and producer prices in China last month largely met expectations and follows trade data on Thursday that showed a sharp jump in imports.

AUD/USD rose 0.05% to 0.7785, while USD/JPY changed hands at 108.88, up 0.13%. GBP/USD gained 0.20% to 1.3940 adn EUR/USD rose 0.07% to 1.2255.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.06% to 90.14.

In China, consumer prices rose 0.6%, compared with a 0.7% gain seen on month for January and at a 1.5% rise as expected on year. Producer prices rose 4.3% on year as expected. The Aussie's fortunes are closely ties to economic conditions in top trade partner China.

China reported trade balance data with a $20.34 billion surplus, compared to a $54.10 billion surplus seen for January, data released on Thursday showed.

Exports rose 11.1%, compared to a 9.6% gain seen and up from 10.9% in December, while imports soared 36.9%, compared to a 9.8% rise expected, and a jump from 4.5% in December.

Overnight, the dollar traded lower against a basket of major currencies easing off session highs as US bond yields pared some of their gains but remained well supported.

The vote comes amid opposition from both sides of the political isle amid concerns that the budget deal does nothing for young immigrants. The budget deal would have to be passed before midnight to avoid a government shutdown.

Upbeat labor market data, meanwhile, did little to offset risk off sentiment investor jitters as the safe-haven yen made strong gains against the greenback.

The U.S. Department of Labor reported Thursday that initial jobless claims decreased 9,000 to a seasonally adjusted 221,000 for the week ended Feb. 4, beating forecast for a 6,000 increase.

The Bank of England stood pat on interest rates overnight, but signalled that rate hikes could be needed earlier than expected as the rapid pace of inflation continued