Ella 
In early Asian trading on Friday, the AUD/USD currency pair remained on the defensive. AUD/USD fell on stronger than expected US inflation data for December. Investors are awaiting inflation and trade data from China on Friday for fresh impetus. AUD/USD is currently trading around 0.6688, up 0.03% on the day.
Data released by the U.S. Bureau of Labor Statistics on Thursday showed that the overall U.S. consumer price index (CPI) rose by 0.3% on a monthly basis in December from the previous value of 0.1%, which was higher than the expected value of 0.2%. The core consumer price index increased 0.3% monthly and 3.9% annually. The previous value increased 4.0%, which was better than the expected value of 3.8%.
Upbeat U.S. inflation and labor market data last week prompted investors to question the Federal Reserve’s plans to cut interest rates in the second quarter. This in turn boosted the US dollar (USD) and weighed on AUD/USD.
In the Australian dollar, Australia’s trade balance jumped to A$11.437 million in November. At the same time, the monthly rate of exports of goods and services was 1.7%, compared with the previous value of 0.4%; the monthly rate of imports fell by 7.9% in December, compared with a decrease of 1.9% in the previous month.
In addition, China’s consumer price index (CPI), producer price index (PPI) and trade balance will be released on Friday. If Chinese data is stronger than expected, it could boost the Australian dollar, which acts as a proxy for China.
Next, the focus will turn to the U.S. Producer Price Index (PPI) in December, which is expected to increase by 0.1% monthly and 1.3% annually. The core producer price index is estimated to fall to an annual rate of 1.9% from a previous reading of 2.0%. These data will provide direction for the AUD/USD pair.
