Australian Dollar Sinks on Weak Chinese Data Set
THE TAKEAWAY: Chinese industrial production, retail sales weaker than expected -> Correlated currencies take a hit
Chinese industrial production grew less than expected in April, rising 9.3% on the year versus the expected 12.2%, a government report said today. Retail sales also took a hit, coming in a full percentage point weaker than expected at 14.1%. Today’s numbers followed a recent government report that said inflation in April remained below the Chinese government’s targets, and another report which had exports and imports coming in weaker than expected in April.
Recent weak data out of China have added to speculation that the government will intervene to boost lagging economic growth in the country. But so far, China appears to be feeling the global slowdown as Premier Wen’s recent crackdown on the property market cools domestic demand. Meanwhile, the European debt crisis continues to negatively impact global appetite for Chinese products.
The Australian Dollar and other correlated currencies plummeted as the weak data diminished confidence in the Chinese economy. AUDUSD made a fresh session low, and approached support by yesterday’s low of 1.0032.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.