The issue of a potential slowdown in global growth resurfaced after the release of softer than expected Chinese data. Chinese Q2 GDP is down 11.9% from the previous quarter and retail sales are down by 18.3%. The weak data triggered selling of Asian stocks further hampering the Australian Dollar. Traders of Aussie currency rely on Chinese stocks movements for leads when there is a lack of market events to guide trading. This is because China is the South Pacific nation’s largest trading partner and some analysts believe stock movements are an indication of the future of China’s economy.
Declines in the Australian Dollar were limited as metals giant Alcoa Inc., posted a profit for the first time in three quarters helping to buoy U.S. stocks and the highly correlated Australian dollar.
“Decent U.S. data and better company earnings than priced- in should buoy U.S. risk appetite which will rub off on equities and commodities and therefore rates and currencies,” said Imre Speizer, a market strategist in Wellington with Westpac Banking Corp.
The rate was further lifted following the Westpac Consumer Sentiment Indicator. The Index rose by 11.1% showing consumer confidence in Australia for the July period has bounced back. This is the strongest monthly increase since the survey began in the mid-1970s.
AUD/ GBP: 0.5681
AUD/ EUR 0.6721
AUD/ USD: 0.8688
AUD/ JPY: 75.26
Exchange rates as of 08:18, 19 July 2010
www.australiantimes.co.uk/currency
Australian dollar big winner on strong employment data