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Forex - Aussie down after mixed China data, GDP beats expectations

Published 10/18/2015, 10:08 PM
Updated 10/18/2015, 10:10 PM
Aussie down after China GDP
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Investing.com - The Aussie fell in Asia on Monday after mixed data on China's economic growth, though GDP rose more than expected.

AUD/USD, closely linked to China's economy, traded at 0.259, down 0.11%, while USD/JPY changed hands at 119.29, down 0.11%. EUR/USD jumped in Asia by 0.26% to 1.1376.

In China, third quarter GDP rose 1.8%, a tad better than the 1.7% gain seen and at an annual pace of 6.9%, also beating the expected 6.8% rise expected.

Fixed asset investment rose 10.3%, below the gain of 10.8% seen year-on-year in September and industrial output rose 5.7%, well below the expected 6.0% gain year-on-year in September, while retail sales rose 10.9%, above the 10.8% seen in the same period.

The data is closely watched amid fears that a China-led slowdown in global growth could prompt the Fed to delay hiking rates for longer.

Earlier, Bank of Japan Governor Haruhiko Kuroda on Monday said the central bank will make necessary adjustments to its aggressive easing while monitoring risks to growth and inflation.

"The QQE (quantitative and qualitative monetary easing) has been exerting its intended effects," he said to a meeting of bank staff.

He also repeated the BOJ's mantra that it will continue with QQE, aiming to achieve the price stability target of 2%, "as long as it is necessary for maintaining that target in a stable manner."

"The BoJ will continue to monitor both upside and downside risks to growth and inflation, and make adjustments as appropriate," he said.

The BoJ will release its quarterly report on economic conditions in Japan's nine regions at 1400 JST (0500 GMT). In July, one region upgraded its economic assessment from three months earlier while the remaining eight regions maintained their views, with all saying the economy was recovering.

As well in New Zealand, labor costs rose 0.5% as expected in the third quarter.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.15% to 94.63.

Later in the day, Fed Governor Lael Brainard is to speak at an event in Chicago.

Investors are also focused on the outcome of Thursday’s ECB meeting.

Last week, the dollar was broadly higher on Friday and the euro weakened amid expectations that the Federal Reserve may still raise interest rates this year while the European Central Bank could scale up its quantitative easing program.

Data on Friday confirmed that the rate of inflation in the euro area turned negative in September for the first time since the ECB launched its trillion euro asset purchase program in March, with the consumer price index down 0.1% on a year-over-year basis.

The greenback’s gains were held in check following the release of mixed U.S. economic reports.

The University of Michigan’s survey of consumer sentiment rebounded in October, following four months of declines.

The preliminary reading of the UoM consumer sentiment index came in at 92.1 compared to forecasts of 89 and up from 87.2 in September.

But another report showed that U.S. industrial production declined 0.2% in September, pressured lower by weakness in the oil and gas sector.

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