With the outlook for Australian exports dampened by disappointing economic news from China the ‘Aussie’ continued to fall against its American counterpart.
The Australian Dollar exchange rate was trading in the region of 1.0227 against the US Dollar as of 09:49 am GMT
Fears of a slowdown in the world’s second largest economy were exacerbated after Chinese industrial production figures were shown to be weaker-than-forecast, and the ‘Aussie’ was knocked as a result.
Over the weekend China’s statistics bureau reported that in the first 2 months of this year industrial production increased by 9.9 per cent on the year, 0.7 per cent less than predicted by economists and the weakest growth for the period since 2009.
China’s retail sales figure was also lower than forecast.
As China is Australia’s main trading partner this news, particularly when viewed in conjunction with last week’s worse-than-anticipated Chinese import figures, is disappointing.
With the outlook for Australian exports dampened by these developments the nation’s currency declined against the US Dollar during local trade, extending those losses recorded at the close of last week and falling against several of its other most traded peers. Declines were exacerbated as the ‘Greenback’ broadly strengthened following a series of positive data releases for the US.
As Sydney-based chief economist Hans Kunnen commented; ‘The combination of weaker Chinese industrial production and a strong US jobs number was never going to be good for the Aussie. [The] Aussie and Kiwi will remain under pressure in the short term […] One of the downside risks for the Aussie has been a resurgence of the US economy and we’re seeing elements of that. Retail sales can be another chapter in that resurgence.’
Economists have predicted that Wednesday’s report will show that US retail sales gained for a fourth consecutive month in February, perhaps rising by 0.5 per cent.
The next piece of influential Australian data is the nation’s business conditions report for February, due for release tomorrow at 00:30 GMT
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