RTTN:Australian Dollar Strengthens As China Registers Upbeat Quarterly Growth
Encouraging economic growth in China boosted the Australian dollar on Friday as China is Australia's biggest trading partner and the key export destination for its mining rich industry.
China's gross domestic product expanded 7.8 percent on year in the third quarter of 2013, in line with forecasts and up from 7.5 percent in the second quarter.
Year to date, GDP is up 7.7 percent on year, also matching expectations and up from 7.6 percent in the previous three months.
On a quarterly sequential basis, GDP added 2.2 percent, beating forecasts for 2.1 percent following the upwardly revised 1.9 percent increase in the three months prior.
Industrial output in China was up 10.2 percent on year in September, in line with expectations although easing from 10.4 percent in August. Year to date, output is up 9.6 percent, also matching forecasts and up from 9.5 percent in the previous month.
Retail sales collected an annual 13.3 percent, shy of forecasts for 13.5 percent and down from 13.4 percent in August. On the year, retail sales are up 12.9 percent, as expected and up from 12.8 percent a month earlier.
Meanwhile, the Reserve Bank of Australian governor Glenn Stevens said that he favors lower Australian dollar to help rebalance growth in the nation's economy.
Elsewhere in Asia, the rating agency Standard & Poor's affirmed its sovereign credit ratings on Japan, citing the economy's strong external position and improved political stability.
Japan's long- and short-term unsolicited sovereign credit ratings were affirmed at 'AA-' and 'A-1+', respectively. The outlook on the long-term rating remained 'negative.'
The Australian dollar rose back above the 94.50 level against the yen after a gap of nearly 4-1/2 months, rising as much as 94.56 around 2:35 am ET, its highest level since June 06. With the recent rally, the aussie-yen pair is moving closer to its 200-day simple moving average level at 94.73.
The Australian dollar extended its overnight gains against its Tasman rival, with the cross touching a 2-day high of 1.1385, up from Thursday's New York session close of 1.1356. Further bearish extension could lead the AUD/NZD pair challenging the 1.14 resistance level in the near-term.
The Australian currency failed to challenge yesterday's peak against the US dollar, with the pair rising as high as 0.9646, just one pip short of yesterday's fresh 4-month high. Further positive trend could lead the pair re-testing the 200-day SMA at 0.9760.
The aussie showed some broader consolidation against the euro in most of Friday's Asian session, swinging back and forth between 1.4225 and 1.4180. The pair sits pretty close to a trend-line support of a horizontal channel at 1.42.
