Commodity-linked currencies, notably the New Zealand and Australian Dollars, experienced a sharp decline after China’s National Bureau of Statistics reported earlier today that exports declined to -15% in March, well off the consensus expectations of a decline to only 12% and the worst numbers in 12 months. Imports also declined to -12.7%, suggesting that demand from Chinese consumers was generally lackluster, and that is in spite of the Chinese government’s and the central bank’s efforts to move toward a more consumer-centric economy similar to that in the US. The dismal trade data, taken together, suggests to both analysts and FX traders that growth in China, the second largest economy in the world, continues to be fragile.
As reported at 9:12 am (GMT) in London, the AUD/USD pair dipped 1.5% to trade at $0.7570, not far from this month’s 6-year low while the NZD/USD lost about 1% to trade at $0.7445. The USD/CAD, also deemed a commodity-linked currency given its reliance on oil trade, traded higher at C$1.2629, off the session peak of C$1.2646.
World Bank Lowers Growth Forecasts
Earlier this week, the World Bank announced that it had lowered 2015 growth forecasts for 2015 for China on Monday, warning investors of "significant risks” as a result of global uncertainties. Both Australian and New Zealand trade extensively in the Far East, and specifically China, and news that economic growth may be waning would weigh heavily on the currencies.