The Australian dollar is trading higher today after a range of data hit the market from China sending mixed signals on the state of the Chinese economy.
At 9.13pm (GMT) the Aussie dollar was trading at US72.99c up from US72.71c at close of trade on Friday.
Third quarter GDP data from China came in at 6.9% against analysts’ expectations for a figure of 6.8%, while retail sales came in at 10.9% against a consensus of 10.8%.
The disappointment of the day was the industrial production figures, which came in at 5.7%, well below predictions of a 6% rise. The news may go some way to alleviate fears that the Chinese economy is heading for a big crash but may present a problem for the Australian dollar on another front.
One of the reasons cited by the US Federal reserve for keeping rates on hold last month was the lingering problems in the global economy and especially China but with this news, some analysts are predicting that they may be able to go forward with a rate hike this year.
This threat, along with a potential rate cut from the Reserve Bank of Australia is likely to see the Australian dollar remain under pressure for the rest of the year as the difference in Interest rates narrows and the Aussie dollar loses its attractiveness as a carry trade.
The market will now await tomorrows minutes meeting from the Reserve Bank of Australia where global growth and Australia’s potential real estate bubble are expected to be on the agenda.
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