Home Forex Market News AUD/USD: Aussie accelerates on stronger than forecast Chinese growth data

AUD/USD: Aussie accelerates on stronger than forecast Chinese growth data

The Australian dollar advanced against its US counterpart Tuesday, as a flurry of economic data from China confirmed the world’s second largest economy was growing at a robust pace in the third quarter.

The AUDUSD climbed to a daily high of 0.8831. The pair would subsequently consolidate at 0.8818, advancing 0.39 percent. According to the daily chart, initial support is likely found at 0.8752. On the upside, resistance is ascending from 0.8835

The AUDUSD has advanced 0.7 percent in the first two days of the week, as the markets await more compelling data from the United States.

In economic data, the Chinese growth engine moderated slightly in the third quarter, although the rate of growth was bigger than forecast.

China’s gross domestic product accelerated 1.9 percent in the July to September period, following a 2 percent gain in the previous quarter, the National Bureau of Statistics reported today. Economists forecast a quarterly increase of 1.8 percent.

Year-on-year, China grew 7.3 percent in the third quarter, surpassing estimates calling for a 7.2 percent rise. The economy had grown at an annualized rate of 7.5 percent in the second quarter.

Separately, Chinese factory output rose sharply in September, rebounding from August’s six-year low. Industrial production rose 8 percent in the 12 months through September, following a 6.9 percent increase the month before. Economists forecast a gain of 7.5 percent.

Chinese retail sales rose 11.6 percent in the 12 months through September, the government reported today. That was lower than the 11.9 percent annualized clip reported in August and 0.2 percentage points below the median estimate of economists.

Concerns about a slowdown in China were voiced by the Reserve Bank of Australia, which earlier this month voted to keep interest rates at a record low for the fourteenth consecutive month. The minutes of those meetings, which were released today, suggest policymakers are concerned about a weak global recovery, particularly in China, Japan and Europe. The focus on these markets was more pronounced than in previous rate discussions, a sign policymakers were concerned global headwinds could stymie growth for the world’s twelfth largest economy.

“The global data released over the past month suggested that Australia’s major trading partners had continued to grow at around their long-run average pace over the past year, although there had been quarterly volatility in growth in some of the major economies through the year,” the minutes of the October meetings revealed today.

Regarding the local currency, RBA officials noted that it had depreciated since September, but that it “remained high by historical standards – particularly given recent declined in key commodity prices.”

The RBA added that the Aussie “was offering less assistance than would normally be expected in achieving balanced growth in the economy.”

In trade-weighted terms, the Australian dollar tumbled 4 percent over September, the RBA noted. That was mainly due to a 6 percent drop against the US dollar, which soared to record highs last month.

More Details



Please enter your comment!
Please enter your name here

Most Popular

Recent Comments