Aussie Dollar Boosted by ASX 200 Gains Instead of Chinese Data
- The Australian Dollar failed to take much notice of higher Chinese industrial profits
- Data likely did little to alter RBA policy expectations after recent dovish commentary
- The sentiment-linked currency then resumed its advance, following ASX 200 higher
What do retail traders’ buy/sell decisions hint about the Australian Dollar trend? Find out here.
The Australian Dollar briefly paused its rally against its major counterparts to digest some Chinese industrial profits data. The figures showed returns rising 19.1 percent y/y in June from 16.7 percent in May.
Since China is Australia’s largest trading partner, economic news-flow from the former country often implies knock-on effects on the latter, triggering a response from the currency. In this case, the reaction to the positive data was rather mute.
This arguably makes sense considering recent dovish RBA commentary that pushed back against rate hike speculation. Yesterday, Governor Philip Lowe echoed what Deputy Governor Guy Debelle mentioned last week. Mainly the message is that their estimate of a “neutral rate” of 3 percent does not mean imminent tightening is on its way.
Rather, the sentiment-linked Aussie Dollar appeared to be enjoying the upbeat mood in the stock markets. Before (and after) the Chinese data crossed the wires, AUD/USD was following ASX 200 shares higher. It also doesn’t hurt that Asian stocks, such as the Nikkei 225, were also climbing after market open.
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