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Aussie, Sterling Lower on Mixed Chinese Data and Brexit Concerns

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US dollar versus New Zealand dollar (NZD). Financial background. Trading terminal.

The Aussie and Sterling fell on Thursday on mixed prices data out of China and Brexit concerns.

In Asia, the Australian dollar was impacted by data out of China that showed mixed prices as consumer levels eased. AUD/USD was down 0.15% at 0.7478.

China’s CPI data for May showed a 0.5% decline month-on-month and a 2% gain year-on-year. Producer prices eased less than expected, at 2.8% year-on-year.

Meanwhile, the pound was lower against the dollar on Thursday as increased concerns of a potential Brexit offset positive trade data out of the U.K.

In morning trade, GBP/USD reached a peak low of 1.4466, down 0.26%, from 1.4459 earlier.

The U.K.’s Office for National Statistics reported that the trade deficit contracted more than expected in April as the country experienced a record increase in imports.

Exported goods volume increased £2.2 billion, or 11.2%, from the previous month, pushing the value of goods exports to £26.1 billion.

Imports were also up by £2 billion, reaching £36.6 billion.

The new data indicates that current weaknesses in trade may be finally ending.

Despite this, sentiment on the pound was fragile, as investors remain focused on the Brexit referendum on June 23.

While recent data has pointed to a greater chance of the U.K. remaining in the EU, opinion polls have had contradictory results, which has investors concerned.

Back in the Asia Pacific, the New Zealand dollar was trading higher against the dollar, at 0.7120, up 0.39%. The gains were driven by New Zealand’s central bank deciding to hold its cash rate steady at 2.25% and indicated that there was room for easing.

In the U.S., the dollar dropped to a one-month low against other major currencies overnight amid uncertainty over the timing of the next Fed rate hike. Sentiment on the dollar was fragile after Fed Chair Janet Yellen indicated that the central bank would not be raising rates until uncertainties in the economic outlook had been resolved.

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