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17/05/24
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AUD Climbs To 4-Month High
On Friday, the Australian dollar was down, and AUD/USD traded at about 0.6658 0.31% lower for the day in the European session.
On Thursday, the Australian dollar hit a high of 0.6714, the highest level since Jan. 10. This came after Wednesday’s huge 1% surge after the US April CPI inched down, fueling expectations of a rate cut by the Federal Reserve.
On Friday, data from China was mixed. In April, industrial production rose by 6.7% y/y, compared to March’s 4.5% and much higher than the 5.5% market estimate. Manufacturing activity was stronger as the government provided the economy with stimulus after its recovery from COVID-19 was bumpy.
Consumers in China have reduced spending due to uncertain economic conditions and retail sales for April were disappointing as it dropped to 2.3% y/y.
This was lower than March’s 3.1% and less than the market forecast of 3.8%. Although retail sales were still positive, the April release was the lowest in 15 months and would likely get policymakers’ attention.
China is Australia’s biggest trading partner and a decline in Chinese domestic demand would mean trouble for the export sector in Australia and may weigh on the Australian currency.
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