Forex - Australian dollar down on weak Chinese imports for November

Investing.com - The Australian dollar dropped on Monday after China posted disappointing import figures for November with the yen also weaker.

China said November exports rose 4.7%, below the 7.9% expected, while imports declined 6.7%, well below the 3.5% gain expected, but the overall trade surplus reached $54.47 billion, well above expectations of a surplus of $43.15 billion.

AUD/USD changed hands at 0.8299, down 0.14%, while USD/JPY traded at 121.57, up 0.10%. China is the top export desitination for Australian commodities such as iron ore.

Earlier, Japan's third quarter GDP fell 0.5%, more than the decline of 0.1% expected quarter-on-quarter. Also, Tokyo reported a current account surplus of ¥833 billion for October, much wider than the ¥395 billion expected.

Last week, the dollar rallied to fresh multi-year highs against a basket of other major currencies on Friday after a particularly strong U.S. employment report prompted investors to bring forward expectations for a hike in U.S. interest rates.

The Labor Department reported that the U.S. economy added 321,000 jobs in November, far more than the 225,000 forecast by economists and the largest monthly increase in almost three years.

September’s figure was revised up to 243,000 from a previously reported 214,000 and the unemployment rate remained unchanged at a six-year low of 5.8%.

The unusually strong data saw investors bring forward expectations for the first hike in U.S. interest rates to mid-2015 from September 2015 before the report.

The dollar has strengthened in recent months on the back of the diverging monetary policy stance between the Federal Reserve and central banks in Europe and Japan, who are expected to continue monetary easing.

The U.S. dollar index, which measures the greenback against a basket of six major currencies, fell 0.01% to 89.38.

In the week ahead investors will be awaiting Thursday's U.S. data on retail sales and jobless claims and Friday’s report on consumer sentiment for further indications on the strength of the economic recovery.

On Monday, Switzerland is to publish reports on retail sales and consumer price inflation, which accounts for the majority of overall inflation.

Later Monday, Canada is to produce data on building starts and housing permits.

China later this week reports on consumer prices and industrial production. Central banks in New Zealand and Switzerland are also to hold policy setting meetings next week.