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Aussie down as China reports stable GDP output

2017-7-17 13:45:15Trading Strategies
Aussie down as China reports stable GDP output

The Aussie trended weaker ahead of second quarter China GDP on Monday expected to set the tone for demand for commodities.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was fell 0.04% to 94.86.

China released second quarter GDP growth with a gain of 1.7% that matched expectations and a year-on-year increase of 6.9% that came in slighltly higher than the expected 6.8%. At the same time, China reported industrial production gained 7.6% from a year earlier in June and retail sales rose 11% in June.

AUD/USD traded at 0.7823, down 0.09% with China a top trading partner for energy, metal and food commodities, while USD/JPY changed hands at 112.44, down 0.09% as well.

On Thursday the European Central Bank meeting will provide fresh clues on when the central bank will shift away from its ultra-easy policy. Markets in Japan are shut on Monday for a holiday.

In testimony before Congress on Wednesday, Fed Chair Janet Yellen said the economy is on a strong enough footing for the Fed to raise rates and begin winding down its massive bond portfolio.

However she also reiterated that inflation is below target and noted that it is a particular “uncertainty” that could affect monetary policy.

The Australian dollar surged to an almost 15-month high, with AUD/USD jumping 1.28% to 0.7829 in risk-on trade as global stock markets hit record highs. The New Zealand dollar was also higher.