ET:Euro pressured, Aussie dollar slips on weak China trade data
TOKYO: The euro remained under pressure in Asia on Friday and the Australian dollar skidded after weaker-than-expected Chinese trade data raised fears of a slowdown.
China's exports grew just 1.0 percent in July from a year earlier, significantly below market expectations for an 8.6 percent rise, while imports grew 4.7 percent, compared to expectations for 7.2 percent.
The Australian dollar was down 0.5 percent at $1.0518, touching its lowest levels in a week just a day after cresting at $1.0615, its highest level since March 20.
Ahead of the Chinese data, the Aussie dropped after the release of the Reserve Bank of Australia's quarterly statement on monetary policy, in which it upgraded its 2012 outlook for economic growth but warned a strong currency could constrain growth to a greater extent than in the past.
"The Aussie has positive and negative factors. It benefits from high Australian yields on its highly-rated debt, but it's sensitive to the country's exposure to China, and naturally falls on bad economic news like this from its major trading partner," said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo.
The euro remained down about 0.1 percent at $1.2288 but was well above Thursday's low of $1.2266 and also above a more than two-year low of $1.2042 hit last month, though it was still shy of its one-month high of $1.2444 set on Monday.
Weak German economic data weighed on the euro on Thursday, as well as the ECB's latest monthly bulletin citing downside risks to the euro zone's economic outlook.
Persistent hope that the European Central Bank will act to ease borrowing costs for Spain and Italy helped the European unit take back some of those losses, though investors were wary on the euro's outlook.
"The euro is working its way through another small corrective phase within a massive, long-term downshift," said Richard Hastings, macro strategist at Global Hunter Securities.
"A lot of attention is going to the euro's existence, but our biggest worry is its price for now," he said.
