AUD/USD edges lower, China data beats expectations
The Australian dollar started the day higher but has reversed directions. In the North American session, AUD/USD is trading at 0.6357, down 0.13%.
The US dollar has steamrolled the Aussie, which hasn't posted a winning week since September and dropped close to a one-year low last week. The Australian dollar has bounced back this week, however, gaining 1.08%.
The situation in the Middle East remains perilous, with the risk that the Israel-Hamas war could spread and ignite a regional war. President Joe Biden has arrived in Israel, a move intended as a warning to Iran and others not to enter the conflict. The fighting has not affected risk sentiment, as investors haven't panicked and snapped up greenbacks. Still, the Middle East is a powder keg at present and if the situation worsens, we could see a flight to the US dollar.
Australia will release employment numbers on Thursday. Job growth has been solid and posted a strong gain of 64,900 in August. Employment is expected to fall sharply to 20,000 in September. Unemployment has been at low levels and is expected to remain at 3.7% for a third straight month.
China is Australia's number one trading partner, which means that Chinese releases can have a significant impact on the Australian economy. China's post-Covid recovery has been much weaker than expected, and deflationary pressures and a property crisis could have negative implications for the global economy.
Chinese released key data on Wednesday and all three releases beat expectations. GDP for Q3 rose 4.9% y/y, above the consensus estimate of 4.4% but well shy of second-quarter growth of 6.3%. Retail sales for September climbed 5.5% y/y, up from 4.6% in August and above expectations of 4.9%. Finally, industrial production was unchanged in September at 4.5% y/y, compared to the consensus estimate of 4.3%. China's economy may be in better shape than expected, but the road to recovery is likely to be a bumpy one.
AUD/USD is putting pressure on support at 0.6343. Below, there is support at 0.6240
0.6399 and 0.6430 are the next resistance lines
The US dollar has steamrolled the Aussie, which hasn't posted a winning week since September and dropped close to a one-year low last week. The Australian dollar has bounced back this week, however, gaining 1.08%.
The situation in the Middle East remains perilous, with the risk that the Israel-Hamas war could spread and ignite a regional war. President Joe Biden has arrived in Israel, a move intended as a warning to Iran and others not to enter the conflict. The fighting has not affected risk sentiment, as investors haven't panicked and snapped up greenbacks. Still, the Middle East is a powder keg at present and if the situation worsens, we could see a flight to the US dollar.
Australia will release employment numbers on Thursday. Job growth has been solid and posted a strong gain of 64,900 in August. Employment is expected to fall sharply to 20,000 in September. Unemployment has been at low levels and is expected to remain at 3.7% for a third straight month.
China is Australia's number one trading partner, which means that Chinese releases can have a significant impact on the Australian economy. China's post-Covid recovery has been much weaker than expected, and deflationary pressures and a property crisis could have negative implications for the global economy.
Chinese released key data on Wednesday and all three releases beat expectations. GDP for Q3 rose 4.9% y/y, above the consensus estimate of 4.4% but well shy of second-quarter growth of 6.3%. Retail sales for September climbed 5.5% y/y, up from 4.6% in August and above expectations of 4.9%. Finally, industrial production was unchanged in September at 4.5% y/y, compared to the consensus estimate of 4.3%. China's economy may be in better shape than expected, but the road to recovery is likely to be a bumpy one.
AUD/USD is putting pressure on support at 0.6343. Below, there is support at 0.6240
0.6399 and 0.6430 are the next resistance lines