On Wednesday, the national statistic institution of China published the inflation data at producer level. It increases for about 1.7 percent yearly on February. This number is above the expectation of 1.5% rise and sharply increase than the last period.
The increase of that level in the last two months is triggered by the more expensive cost of the raw materials and production. The prices of the production tools increases for more than 2.3% in February. It is 1.8% higher than the last month.
Meanwhile, the cost of smelting iron and rolling metals rose 14.1 percent. Then, the cost of smelting and processing non-ferrous metal milling rose 12.1 percent. The same trend also occurred in the cost of mining and coal laundering which increased by 10.9 percent.
The Consumer Inflation Is Still Low
The separated release stated that the Consumer Inflation data or CPI of China was reported decline by 0.2% yearly in February. That number is a little bit better than the previous month and beyond the experts expectation who thought of 0.4% decline.
From the monthly basis, it is known that China consumer inflation increases by 0.6% in February. That number in fact is lower than the achievement on January. However, it is better than the expectation of economy experts in that country so far.
Weak consumer inflation data is due to the weakening price of foodstuffs such as pork which has decreased significantly. Similar conditions also occurred in non-food prices which weakened 0.08 percent on an annual basis. However, the market is still so optimism.
They are sure that the trend will become positive again in the next few months. It is because the demand amidst the economy recovery is back. It shows that China is slowly but sure will recover its economic situation from the long coronavirus pandemic.
The Updates of Australian Dollar Versus USD
Meanwhile, the effort of the Australian Dollar rebounf versus USD has an obstacle. It is especially from a statement made by the number one person who lead the central bank there. That new statement is from Philip Lowe as the RBA Governor.
He said in a meeting held by the Australian Financial Review today that the benchmark interest rate (OCR) will remain at a historical record low "at least until 2024". That is as wage growth is unlikely to reach more than 3 percent before then.
Lowe noted that the fee growth in Australia today is only 1.4%. That is the lowest record so far. The salary growth has been weakened since before the pandemic of COVID-19. That was even worse after this long pandemic that broughts tons of problems.
The structural problems and technology development inhibiting the increase of the salary. The same thinh also happens on the employment market regulation change. Lowe positively responded the better economic data of Australia lately. However, the jobless level is still high until now.
Weakening of the Australian Dollar Exchange Rate
Lowe also stated that the investment of business is still low. That is even the ability of people to buy something is better since the consumer sentiment is recovered. That low business investment makes many coorporates don’t want to recruit more employees.
The central bank official stated his expectation of a low interest rate or dovish. It causes the weak exchange rate for its currency. That is especially for the currency of the developed countries and for the commodity currency as well such as the Australian Dollar.
Until this news is published, the Australian dollar or AUD / USD was sold lower. It was around the level of 0.7700. However, many experts are still sure about the Australian dollar bullish prospect this year since the main export commodity price which is so high.
