Australian Dollar Failed To Respond To Good Economic Data From China
January 18, 2013 in Forex Fundamentals and News
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 29.1% 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/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.