THE TAKEAWAY: Chinese gross domestic product grew by 7.8 percent in the fourth quarter > New Zealand CPI figures fell short of RBNZ target > AUDNZD traded lower
The Australian dollar was little changed as the Chinese economy grew 7.8 percent in the fourth quarter, up from 7.4 percent in the third quarter. At 2:00 GMT today, gross domestic product figures crossed the wires reporting fourth quarter results at 7.8 percent, roughly meeting expectations set for 7.8 percent on a yearly change basis. GDP on a quarterly basis grew by 2.0 percent, falling shy of expectations set at 2.2 percent.
Australian growth prospects may look to improve as the world’s second largest economy stabilizes from recent slowing where growth rates slowed from 11.9 percent in the first quarter of 2010 to 7.4 percent in the third quarter of 2012.
Forex traders appeared little surprised immediately following the release. At 21:45 yesterday, New Zealand CPI figures crossed the wires at -0.2% in the fourth quarter falling short of the Reserve Bank of New Zealand’s medium-term target range of one percent to three percent inflation. The New Zealand currency lost value versus its major counterparts amid concern that RBNZ policy officials may cut lending rates in an attempt to spur growth and achieve their inflation objectives. The next RBNZ policy meeting is scheduled for January 30. Currently markets are pricing in a two percent probability that the central bank will reduce rates by 25 basis points.
AUD/NZD, 15 Minute Chart