Inflation In China Accelerated To 5.3% - 11.5.2011

Asian stock markets were mostly higher on Wednesday, however some gains were pared after inflation data was released in China, showing that further tightening measures are possible. Chinese consumer price index increased by 5.3% annual pace in April after rising by 5.4% in March, in its sharpest surge in nearly three years. Food prices, which represent on of the key drivers of price level surge rose by 11.5% in April and by 11.7% in the previous month, according to China’s statistics bureau. Japanese Nikkei Stock Average gained 0.46% by the end of Asian trading session. US stocks also gained ground yesterday, with DJIA climbed by 0.6%, Nasdaq rose by 1.01% and S&P 500 added 0.81%. Crude oil contracts for June delivery touched today 104.60 dollars per barrel, supporting commodity-related currencies. US Dollar The dollar weakened against the euro yesterday after the single currency touched a three-week low 1.4253 following reports Greece may get further restructuring aid. US retail sales rose by 0.6% in April after a 0.4% advance in the previous month, according to estimations before the Commerce Department releases report tomorrow. At the same time initial jobless claims may decline by 44000 to 430000, economists say. Pair EUR/USD traded in a narrow range today 1.4382-1.4422. Australian Dollar Australian dollar rose for a fourth day amid expectations the Reserve Bank of Australia will raise interest rates, spurring demand for the nation’s assets. The Aussie gained ground before a government report tomorrow, which is expected the nation’s jobless rate stays at a two-year low as employers added jobs for a second straight month. Employment in Australia climbed by 17000, economists predicted, while unemployment rate stayed at 4.9%, matching the lowest level in more than two years. Australian government presented its annual budget yesterday and scheduled to deliver the quickest improvement in the country’s finances, returning to a surplus well ahead of its peers. Pair AUD/USD continues its four-day rally, touching today 1.0875. British Pound The pound is weakening against the dollar and the euro on speculation the Bank of England will lower its economic growth forecasts in its inflation report today, making higher interest rates less likely. The Bank of England left its key rate at a record low 0.5% on the previous meeting on May 5. Governor King has indicated he favors keeping borrowing costs on hold even as inflation accelerates at twice the bank’s 2% limit. Pair GBP/USD traded 1.6344-1.6382 this morning. Swiss Franc Swiss currency fell yesterday after the data showed the nation’s consumer prices rose 0.3% in April from a year earlier. Estimations were at a 0.6% gain. That gives the Swiss National Bank room to leave interest rates without changes next month. The central bank kept its benchmark interest rate unchanged at 0.25% at its meeting on March 17. Pair USD/CHF was almost flat during Asian trading hours at 0.8788-0.8810 after touching yesterday a two-week high 0.8823.