Australian Dollar Firm After China GDP Miss But Trend Aims Lower

CHINA, GDP, TRADE WAR, AUSTRALIAN DOLLAR - TALKING POINTS:

• 3Q Chinese GDP registers narrowly worse than expected at 6.0% y/y
• Industrial production data, US trade talks may have offset the headline
• Australian Dollar little-changed but overall trend still pointing lower

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The Australian Dollar found little of interest in mildly disappointing Chinese GDP data. The figures put the on-year growth rate at 6 percent, a hair lower than the 6.1 percent expected by economists. Nevertheless, this marks the slowest pace of expansion in at least 27 years.

Upbeat industrial production readings might have helped offset a soggy headline figure. The rate of on-year growth unexpectedly jumped to a three-month high of 5.8 percent. Early signs of stabilization in retail sales figures may have helped as well.

The report’s limited implications for larger macro themes dominating investors’ attention may likewise explain the tepid response. Extrapolating a view on future Chinese growth seems nearly impossible without greater clarity on trade negotiations with the US, making today’s release appear somewhat moot.

1-minute AUD/USD chart created with TradingView

Assessing the broader landscape, choppy AUD/USD consolidation since early August leaves firmly intact a well-defined downtrend established from late December 2018. Prevailing monetary policy trends suggest it is likely to continue, with longer-term charts setting the stage for deep losses in the months ahead.

Daily AUD/USD chart created with TradingView

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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter