Forex - Australian dollar weaker after prices survey, trade data

Investing.com - The Aussie fell in Asia on Thursday after a survey on prices and a release on trade data, while the yen held mostly steady as a Tankan survey on inflation expectations showed a mixed picture.

AUD/USD traded at 0.7582, down 0.20.03%, while USD/JPY changed hands at 119.71, down 0.03%.

In Australia, the March TD-MI Inflation Gauge rose 0.4%, compared to flat for February and up 1.5% for the first quarter from 1.3% in February with a warning that oil-price related deflation cannot be ruled out for now.

"The RBA board is in an uncomfortable position," said TD head of Asia-Pacific research Annette Beacher.

"The exchange rate remains above the bank's measure of fundamental value - especially given the recent slide in the iron-ore price and the economy is expanding at a lukewarm subtrend pace. In stark contrast house prices and auction-clearance rates are accelerating as record-low finance costs encourage rampant property speculation. While low inflation certainly allows the RBA to cut the cash rate further we pencil in only one more cash-rate reduction to 2% in May."

Also in Australia, the the February trade balance data met expectations of a deficit of A$1.3 billion versus a deficit of A$980 million in January.

In Japan, the BoJ's corporate inflation outlook in the Tankan showed firms expect a 1.4% increase in consumer prices on average in the March survey, the same as in December. Firms on average expected a 1.4% increase in consumer prices in March, down slightly from 1.5% in the previous survey.

BoJ officials have said that inflation expectations appear to be rising on the whole "from a somewhat longer-term perspective" and Japan can achieve stable 2% inflation "around fiscal 2015." They expect the year-on-year change in core consumer prices to stay around zero in the first half of this fiscal year before picking up in the second half.

Many economists and some BoJ board members however remain skeptical about the timeframe for hitting the 2% target.

Then at 1330 (0430 GMT) the BoJ quarterly survey on consumer sentiment and inflation expectations are due. The previous survey showed that the share of the respondents who forecast Japanese prices would rise in the next year slipped to 80.8% in December from 82.5% in September.

Overnight, the dollar remained broadly lower against a basket of other major currencies on Wednesday, after data showed that manufacturing activity in the U.S. expanded at the slowest pace in 14 months in March and that U.S. non-farm private employment rose less than expected.

The Institute for Supply Management said on Wednesday that its index of purchasing managers fell to 51.5 last month from a reading of 52.9 in February. Analysts had expected the manufacturing PMI to decline to 52.5 in March.

Earlier Wednesday, payroll processing firm ADP reported that non-farm private employment rose by 189,000 last month, below expectations for an increase of 225,000. The economy created 214,000 jobs in February, whose figure was upwardly revised from a previously reported 212,000.

Investors turned their attention to the upcoming U.S. jobs report due out on Friday, which was expected to support expectations for higher interest rates.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was quoted at 98.56, up 0.03%.