Australian Dollar Gains on Upbeat Chinese Economic Data
- China’s 1Q GDP growth rate registers at 6.9%, topping forecasts
- Retail sales, industrial production figures outperform expectations
- Australian Dollar gains but risk aversion may limit follow-through
A broadly upbeat set of Chinese data offered a boost to the Australian Dollar. The figures showed the world’s second-largest economy accelerated in the first quarter. The on-year GDP growth rate unexpectedly rose to 6.9 percent, the highest since the three third quarter of 2015.
Retail sales and industrial production figures also surprised on the upside. Receipts added 10.9 percent on-year in March, matching the prior month and heading off forecasts for a slowdown. Factory output grew at 7.6 percent over the same period, the fastest in over two years.
The Aussie often plays the role of proxy asset for Chinese economic trends because the East Asian giant is Australia’s top export partner, making developments there a key determinant of the latter country’s business cycle. Follow-through may be limited however as geopolitical jitters threaten the risk-sensitive currency.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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