Australian Dollar Failed To Respond To Good Economic Data From China

January 18, 2013 in Forex Fundamentals and News

China industrail production risesToday’s The economic data from China came out better than expected in general.

House price Index: According to the National Bureau of Statistics of China, the change in house price index in December as released today was -0.04% and though the index again showed a decline but some improvement was there from November’s -0.7%.

Gross Domestic Product  grew unexpectedly

Chinese GDP saw an unexpected growth during the 4th quarter of 2012. The report released by China National Bureau of Statistics showed an year on year increase in the gross domestic  product as 7.9% which was not only better than the 3rd quarter’s 7.4% increase as compared to the quarter 3 of 2011 but was also better than the consensus of economists which was for 7.8% change. However the quarter on quarter change in GDP was 2.0% and was lower than the expectations of 2.3% and also the quarter 3’s quarter on quarter change of 2.2%.

Industrial production jumped up

Today’s report from National Bureau of Statistics of China showed the industrial production jumped up by 10.3% during December  2012 as compared to the December 2011. The market consensus was that the year on year change in December will be same as that of November i.e. 10.1%.

Chinese retail sales rose

Today’s data also showed an unexpected growth in the Chinese retail sales. The retail sales in December 2012 increased by 15.2%. The market consensus was for a change of 14.9% which was same as what was witnessed during the previous month i.e. November 2012.

Chinese urban investment slowed down

year to date urban investment till December showed slight decline as per the report released today. The year on year change in the urban investment (year to date) came out as 20.6%. This was slightly less than the consensus and November’s 20.7%.

Australian Dollar dropped

AUD/USD: China is the biggest importer of Australian exports with AUD/USD29.1% share as per 2011 data and any strong economic data from China goes in favor of the strength of Australian dollar. The Aussie could not manage that. AUD/USD which had gone as high as 1.0558, failed to test 1.0600 level. The last time  the currency pair had briefly touched 1.0600 was on September 14 2011. That time also it could not sustain and had fallen sharply. Since then it made two more attempts to test that level, one in December and another last week on January 10th but faced strong resistance.  Today after again failing below 1.0600, AUD/USD went as low as 1.0496 which slightly over yesterdays support of 1.0491.

AUD/JPYAUD/JPY: The pair made two attempts to break over the psychological resistance of 95.00. First time it touched 95.01 and second time 95.02 but could not sustain and fell sharply to 94.19.

AUD/JPY has been in a very volatile sideways moves for over 2 years. Every upward move had faced resistance near or below 90.00 level. The pair had broken over 90.00 on December 31st and since then moved up very strongly.


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