MW: Australian dollar drops as China data disappoint
Dollar moves off four-year highs against Japanese yen
By Carla Mozee, MarketWatch
LOS ANGELES (MarketWatch) — The Australian dollar fell against the U.S. dollar Monday after weaker-than-expected economic readings from China, Australia’s largest trading partner.
The Australian dollar AUDUSD -0.8148% fell to $1.0442, down from $1.0516 just before China released the data. The Aussie had bought $1.0501 late Friday in North America.
China’s gross domestic product for the January-March quarter rose 7.7% from a year earlier, weakening from growth of 7.9% in the fourth quarter and missing projections for 8% growth in separate surveys from Dow Jones Newswires and Reuters.
Industrial production for March rose 8.9% from the year-ago period, with the result well below the Dow Jones Newswires forecast for a 10% gain. Production also slowed from a 9.9% average rise for the January-February period, which China’s statistics bureau reports in one figure.
After the reports of slower activity, Australian stocks fell to session lows, pulling the S&P/ASX 200 AU:XJO -0.91% down 1.1%.
The Aussie had edged higher against the dollar earlier Monday after Australia’s statistics agency said the number of new home loans in February rose by a seasonally adjusted 2%, higher than market expectations for an increase of 1.5%.
Meanwhile, the U.S. dollar lost more ground against Japan’s currency after the China data. The greenback USDJPY -0.0997% bought 98.27 yen, down from ¥98.46 ahead of the data and lower than ¥98.92 in Friday’s North American session.
The dollar backed away from four-year highs reached last week against the yen after the U.S. Treasury Department on Friday warned Japan “to refrain from competitive devaluation and targeting its exchange rate for competitive purposes.”
The yen had dropped sharply against the dollar and other currencies since the Bank of Japan earlier this month unveiled an aggressive monetary-easing program in an effort to defeat years of deflation.
The ICE dollar index DXY +0.28% , a measure of the dollar against a basket of six other major currencies, fell to 82.286, down from 82.295 late Friday.
The WSJ Dollar Index XX:BUXX -0.28% , a rival gauge that uses a slightly larger basket, retreated to 73.47 from 73.68.
The British pound GBPUSD -0.1385% moved lower to $1.5316 from $1.5348 late Friday, while the euro bought $1.3074, down from $1.3103.
Carla Mozee is a reporter for MarketWatch, based in Los Angeles. Follow her on Twitter @MWMozee.
