Forex - Australian dollar down after private sector credit data

Investing.com - The Australian dollar gave up early gains despite expected growth in private sector credit on Monday and a private sector survey showed inflation expectations edging up to the higher end of the RBA's inflation band.

AUD/USD traded at 0.9235, down 0.14%, after February private sector credit rose 0.4%, in line with expectations and the TD-Melbourne Institute inflation gauge for March rose 0.2% month-on-month for a trimmed mean annual pace of 2.7%.

In Japan, February industrial output posted the first drop in three months, down 2.3%, far below the 0.3% month-on-month gain expected, with the decline blamed on severe winter weather.

USD/JPY traded at 102.87, up 0.04%, after the data.

Business confidence in New Zealand eased to 67.3% in March but the fall was from the highest level since 1994 at 70.8% in February.

NZD/USD traded at 0.8654, up 0.02%, after the private survey data.

Last week, the dollar rose to two-week highs against the yen as indications that China’s government is prepared to do more to shore up the cooling economy bolstered risk appetite.

Market sentiment was boosted after China's premier Li Keqiang said the country has policies in place to counter economic volatility. The remarks eased concerns over recent signs of a slowdown in the world’s second-largest economy.

Data on Friday showing that U.S. consumer spending rose 0.3% last month after a downwardly revised gain of 0.2% in January also lifted the dollar higher against the yen.

The euro remained under pressure after European Central Bank officials indicated earlier in the week that they are considering fresh policy options to stave off the risk of deflation in the region.

ECB governing council member and Bundesbank head Jens Weidmann said Tuesday that a negative deposit rate could be an appropriate way to address the impact of strong gains in the euro.

The same day ECB President Mario Draghi that the central bank stood ready to act if inflation slipped lower than the ECB expected.

The Aussie was boosted as recent reports indicated that the economy is picking up, while hopes for fresh stimulus measures from China also supported the Australian’s dollar’s gains.

In the week ahead, investors will be looking to Friday’s U.S. nonfarm payrolls report for March for further indications on the strength of the labor market, while Monday’s euro zone inflation report will also be in focus, ahead of the ECB policy meeting and press conference on Thursday.

The U.S. Dollar Index traded at 80.37, up 0.02%.

On Monday, Switzerland is to publish its KOF economic barometer. The U.K. is to release data on net lending to individuals.

The euro zone is to produce preliminary data on consumer price inflation, which accounts for the majority of overall inflation.

Canada is to publish the monthly report on gross domestic product, the broadest indicator of economic activity and the leading indicator of economic growth.