The Australian dollar is trading lower today on the back of weaker than expected than expected data out of China which raised fears of a slowdown in the world’s 2nd largest economy.
At 3.22pm (AEDT) the Aussie dollar was trading at US7679c down from US76.97c in yesterday’s trading.
Statistics out of China earlier today showed that Industrial production was up 6.0 percent year on-year in July, against analysts’ expectations for 6.1 percent growth.
The retail sales figure also missed consensus hitting the market at 10.2 percent against expectations for a figure of 10.5 percent.
The worst performer was the urban investment growth figures which came in at 8.1 percent, well below the expected figure of 8.8 percent.
Australia has long been dependent on the Chinese economy for most of it’s exports but with these figures there is cause for concern for the Australian economy.
Julian Evans-Pritchard, China economist at Capital Economics, noted that the Investment figures would cause more of a problem for the Chinese economy than the industrial production numbers,
"In the long-run, it's pretty concerning to us. The private investors are pretty downbeat on prospects," Mr Evans-Pritchard said,
He also noted that the Chinese government may have to step in to solve the problem by adding more stimulus to the economy,
"Policy makers will have to do more if they want to reverse this trend," he added.
The next test for the Aussie dollar will be the retail sales figure from the US due out later today with a strong figure likely to raise expectations of a rate hike from the US Fed next month which will put even more pressure on the Aussie dollar.