Aussie seems to trading low against dollar, ahead of Australian budget release. It seems that the Aussie ignores the China inflation data.

China CPI recovered but stayed below forecasts, PPI remains strong. China’s Consumer Price Index (CPI) has eased below -0.2% forecast to -0.3% MoM but stayed above -0.5% prior. The yearly CPI was with +0.9% numbers versus +1.0% market consensus and +0.4% previous readouts. It should be noted that the Producer Price Index (PPI) crosses 4.4% prior and 6.6% market expectations with 6.8%.

The Australian budget is about to be announced by 09:30 GMT in the Australian Parliament. Ahead of the release, News reported that “Analysts expect the budget deficit for the year to end June 2021 to come in around A$150 billion ($117.5 billion), still a record but down sharply from an October forecast of A$213.7 billion. The 2021/22 shortfall may shrink further to around A$80 billion.”

Elsewhere, Australia’s Minister for Trade, Tourism and Investment Dan Tehan has stated that the country might keep its borders shut to travellers until late 2022. He expressed that the current surge of COVID-19 cases in the Indian subcontinent hints that Australia has been right in its decision to blanket ban visitors. He also expressed that such a ban is critical to keep Australia COVID-free.

As per the update, there is no surety as to when Australians borders would reopen. Dan Tehan told that “the best guess would be in the middle to the second half of next year”. The nation entered into an air travel bubble agreement with New Zealand previously, which has been paused for cities that are again seeing a surge in the number of COVID-19 cases.

On the other hand, The US Food and Drug Administration has declared the Pfizer vaccine safe for children as young as 12.The American-developed jab is the first vaccine available to children under 16.

It also should be noted that the US Republicans have currently eased their rejection of President Joe Biden’s heavy relief packages and even Australia is ignoring the record deficit to help the Aussie people overcome the pandemic. Recently As per a news, “Australia’s conservative government will ditch decades of deficit warnings to embrace billions in new spending in its annual budget on Tuesday, saying a record shortfall is necessary to “secure” the economic recovery from the COVID-19 pandemic.”

AUD/USD 4 Hour Chart:

Support: 0.7808 (S1), 0.7785 (S2), 0.7744 (S3).

Resistance: 0.7872 (R1), 0.7913 (R2), 0.7936 (R3).

All the catalysts are pressurizing Aussie ahead of Australian budget release, Whether Australia budget changes the trend is yet to be seen. In the meantime, we expect a bearish trend for AUD/USD.