Australian inflation runs hot for April 2023 at 6.8% (estimates of 6.4%). Chinese manufacturing is spluttering out. The RBA may hit a larger rate hike at their next meeting.

The Australian dollar (AUD) pumps high to 0.654 after the soaring Australian inflation figures, then drops half a cent after the Chinese PMI (manufacturing) misses estimates.  Chart above.  As noted in this post, in relation to FX based inflation, to which the Reserve Bank of Australia (RBA) may have betted on China demand via a weak AUD to build Australia's export market after COVID-19's 2020 beatdown.  And if this was indeed the Central Bank's plan, it has been at the expense of inflation, which is souring in Australia, while moving into the 2nd half of 2023 Chinese demand is falling off despite an attractive AUD for exports.  While the Australian consumer is stuck with dwindling purchasing power of the AUD, thus imports are being priced out.  Which is everything.  Australia is essentially a net importer.  All and all, this is pointing to stagflation. 

Expect a 0.50% hike from the RBA come next meeting.

All AUD analysis to date, please refer:  chiasmusmagazine.blogspot.com/search?q=AUD