The Australian dollar was a major loser in foreign exchange market trading on Thursday.

The currency dropped against its American counterpart after pessimistic inflation figures from China, as well as renewed indications that trade talks between the US and China, which have been taking place in recent days, still had an unclear potential outcome.

Australia’s economy is often described as being deeply interlinked with China’s given the trading relationship between the two nations, and negative figures from China can often have knock-on effects for Australia. As a result, the AUD/USD pair was unable to get over the 0.71 mark.

However, the US dollar was also in trouble in some key pairs. In the USD/JPY pair, for example, it saw its lowest point for three days when it hit the 110.27 point.

This came in part due to disappointing statistics out of the US. Retail sales figures in the country showed their biggest slowdown since September 2009, leading to worries for those who trade the dollar.

The coming week holds lots of key events to look out for on the economic calendar.

Monday will be a slow day in much of the forex markets, given the two scheduled North American public holidays which are due to take place and close banks in the US and in Canada.

There may be some response during the day to key figures out of Japan, which will have been released late at night on Sunday at 11.50pm GMT.

Machinery orders information for the month of December is expected at 11.50pm GMT. Year on year, this is expected to show a shift from 0.8% to 0.4%.

On Tuesday, however, economies are likely to be back to normal. Trade balance figures for December are due to come out of Switzerland on Tuesday morning at 7am GMT. The overall trade balance was last recorded at 1,897,000.

Italian industrial sales data will follow at 9am GMT. This is due to shift from 0.1% to -0.3%.

Average earnings for the month of December in the UK, excluding bonuses, are expected at 9.30am GMT. This metric was last recorded at 3.3%.

Economic sentiment information for the month of February in Germany is due at 10am GMT. It is forecast by analysts that this will move from -15.0 to -18.4.

The day will be rounded off by Japanese merchandise trade balance totals for January, which are due out at 11.50pm GMT. This is expected by analysts to change from -56.7 billion yen to -30 billion yen.

Wednesday will see a number of other releases, including a German producer price index for the month of January. This is due to show a month on month change from -0.4% to -0.2%.

Preliminary European consumer confidence figures for the month of February will also be out on Wednesday at 3pm GMT. These were last recorded at -7.9.

However, the key event on Wednesday will be the release of minutes from the Federal Open Market Committee in the US, which is due at 7pm GMT.

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