Australia dollar jumps to 2-month highs on China data, kiwi tumbles
Strong Chinese data released on Wednesday pushed the Aussie past crucial chart hurdles, jumping to two-month highs.
The Chinese data defied expectations after analysts predicted a slowdown to 6.3%.
Australian dollar price
The Australian dollar jumped above 72 US cents to $0.7026, its highest level seen since February 22, after data figures showed China’s economy grew at 6.4% in the March quarter.
AUD/USD has already had an up and down week, hitting a low of $0.7140 on Tuesday after the RBA minutes were released with a dovish tone. Traders wagered on a greater chance of a interest rate cut this year.
China's industrial output also grew at the fastest pace since July 2014 with factories ramping up output in anticipation of more business.
The solid data from China has boosted prospects that the country is starting to stabilise, amid fears of a global slowdown.
New Zealand dollar price
Meanwhile, The New Zealand dollar] tumbled to a 3-1/2 month trough after lukewarm inflation. At last close the kiwi was at $0.6731 after going as low as $0.6668 following weak data that showed inflation had slowed by more than expected in the first quarter. The inflation had slowed more than the central bank had forecast.
Markets recated to the weak data betting that the Reserve Bank of New Zealand (RBNZ) would cut rates from already-record lows of 1.75%, where they have been since late 2016.
Overnight the market was pricing in a 65% chance of a rate cut in May, up from 30 % before the CPI release.
The lukewarm inflation saw New Zealand government bonds with yields down about 6-7 basis points in the short-end of the curve.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
