Over the weekend, disappointing economic news from China came out which could weigh on antipodean currencies in the future as investors consider the far reaching impact of a slowdown. On Sunday, China’s National Bureau of Statistics reported that August’s industrial production edged marginally higher to 6.1% (year-over-year) from 6.0%. However, the figures failed to meet analysts’ expectations of a rise to 6.4%. At the same time, urban investment fell to 10.9% annually, again, short of expectations. The only bright spot in China’s economic news was the unexpected improvement in retail sales. In recent months, the Chinese government has been attempting to make consumers a larger part of its economic growth, moving away from industry. The larger concern for markets is that China’s 3rd quarter GDP numbers could come in below 7%, a level not seen since in many years.
As reported at 11:05 am (BDT) in London, the AUD/USD pair was trading at $0.7122, up about 0.49%. The NZD/USD pair was higher at $0.6332, a gain of 0.22%; the pair has ranged between $0.6302 and $0.6345 in today’s trading session.
Central Banks Eye China’s Economic Future
The Reserve Bank of Australia will be releasing the minutes of its most recent policy meeting tomorrow and traders are anxious to see whether the RBNZ will decide to cut rates again in light of the economic situation in China. New Zealand will be releasing 3rd quarter growth figures on Wednesday and that will help pinpoint monetary policy for New Zealand’s Reserve Bank. Both the Australian and New Zealand economies rely extensively on trade with China and any slow down there could have a negative impact.