Aussie’s Fall – Combination Of New Leadership At People’s Bank Of China And Drop in Inflation
November 15, 2012 3:39 am GMT+0 in Forex Analysis
Australian Dollar fell strongly against U.S. Dollar during past 15 hours after failing below 1.0500 psychological level.
Uncertainties About New Economic Leadership in China
Indications from China that the China’s central bank i.e. People’s Bank Of China (PBOC) will undergo a leadership change and the current Governor of PBOC Zhou Xiaochuan will be retiring.
The possible candidates of the position are considered to be:
- Shang Fulin (Head of China’s Bank Regulator)
- Guo Shuqing (Chief Securities Regulator)
- Jiang Jianqing (Chairman of Industrial & Commercial Bank of China)
- Xiao Gang (Chairman of Bank of China)
It is also indicated that Wang Qishan who is the the Vice Premier and in-charge of economic, energy and financial affairs will take up new role.
The decision about change in the leadership of the Politburo Standing Committee which is the supreme decision making body of People’s Republic of China is scheduled to come out today.
Events of China affect the Australian Dollar very much and the uncertainties because of the change in leadership are evident in the fall of AUD/USD.
Inflation And Other Reports From Australia
Consumer inflation expectation for November showed a decline to 2.2% against the October’s 2.6%. That signals that no immediate interest rate hike is expected. The new motor vehicle sales report for October which is released today showed a decline on year on year basis to 8.6% from the previous 14.4%. The month on month change was also less at -2.8% from the previous 4.6%.
The Australian Dollar fell to 1.0347 before recovering a bit to 1.0381 at GMT 03:34. Further weakness in the AUD/USD can be expected today as the pair failed to test the 1.0500 level during the recent recovery.