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AUD falls due to weak Chinese data

AUD - Australian Dollar

The AUD fell throughout yesterday’s trading day, falling through 0.675 to open at 0.6746 this morning against the USD.

The slightly higher Wage Price Index data release yesterday had little impact on the AUD, with the reason for the fall owing to the weak Chinese data that came back far less than expected. The figures for Industrial Production came back at 4.8%, compared to a forecasted rate of 6.0%, indicating a slowing Chinese economy. As Australia is a close trading partner with China, this was not a good result for the AUD.

Employment data being released just before midday today is expected to have a major impact on the Australian Dollar. The employment change and unemployment rate respectively show the change in the number of employed people and percentage of total work force that is unemployed. Released monthly, job data is an important leading indicator of consumer spending as it accounts for a majority of overall economic activity.

Key Movers

The ongoing protests in Hong Kong continue to grab headlines, with satellite photos showing what appear to be Chinese military amassing across the border from Hong Kong. Concerns about the global economy with the escalating US-China trade war and weak Chinese and European data overnight have been causing a risk-off sentiment, with only the safe-haven Japanese Yen and Swiss Franc outperforming against the other majors.

On the macroeconomic news front, Canadian CPI data is scheduled to be released next Wednesday night. Showing the change in the price of goods and services purchased by consumers, this monthly figure is the most important inflation related release due to its earliness and broad scope.

Further major European data is being released Thursday afternoon, with a sleuth of purchasing managers data from coming out. Focussing on France and Germany, the figures show a level of a diffusion index based on surveyed purchasing managers in the services industry and is a leading indicator of economic health.

Expected Ranges

AUD/CAD: 0.8935 - 0.9015 ▼

AUD/EUR: 0.6005 - 0.6090 ▼

GBP/AUD: 1.7600 - 1.8050 ▼

AUD/NZD: 1.0430 - 1.0550 ▲

AUD/USD: 0.6650 - 0.6790 ▼