The Australian dollar plunged as traders reacted to the weak Chinese industrial output and retail sales as Asia’s biggest economy slows down.
The Aussie was trading at 93.35 U.S. cents as of 5 p.m. in Sydney, down from Monday’s 93.66 cents. The Australian currency traded at 95.53 Japanese yen, up from Monday’s closing figure of 95.43 yen. It also grew to 67.86 euro cents today from yesterday’s close of 68.01 euro cents.
Data released by the China’s National Bureau of Statistics indicated that retail sales fell to their lowest since 2011. April’s retail sales grew 11.9 percent from a year ago, which was lower than 12.2 percent growth posted in March.
Industrial output in China grew 8.7 percent in April from a year ago, down from March’s 8.8 percent expansion, reported The Australian.
The Australian government was due to release its budget estimates today evening, which investors are keenly waiting to pore over due to its implications on monetary policy. The prices of local bond futures remained stagnant as analysts worried whether the budget may include tightening fiscal policy.
The Chinese yuan also surged as traders speculated that Beijing will announce further stimulus to boost economic growth owing to the weak data. The yuan surged 0.13 percent to trade at 6.2291 a dollar. It had earlier declined up to 0.08 percent after the People’s Bank of China fixed the reference rate 0.02 percent lower to 6.1636, its weakest level in eight months. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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