Australian Dollar Falls As China Growth Less Than Expected

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Australian_Dollar_Falls_As_China_Growth_Less_Than_Expected_body_chinese_GDP_April_15.png, Australian Dollar Falls As China Growth Less Than Expected

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THE TAKEAWAY: The Australian Dollar fell from above 1.0510 to below 1.0450 on the release of Chinese data which saw GDP growth and Industrial Production come in less than expected.

Economists were expecting GDP in China to grow 8.0 per cent from the year before but were disappointed when it was announced that GDP only grew 7.7 per cent. The final quarter of last year saw Gross Domestic Product grow 7.9 per cent. The growth rate of GDP measures the increase in value of the goods and services produced by an economy over the period of a year. The components of GDP include consumption, investment, government spending and the difference between exports and imports. With China announcing a surprise trade deficit last week, news of somewhat lower GDP growth may have been expected as the Australian Dollar sold off slightly heading into the announcement. Year on year growth figures for the Chinese economy have been trending down wards over the past two years since a 3 year high of 11.9 per cent growth seen in the first quarter of 2010.

Industrial production in China also fell as economists expected 10.1 per cent growth but were disappointed with the eventual 8.9 per cent print. China is Australia’s largest two way trade partner and the soft data weighed on the nation’s currency as the Australian Dollar fell further on the announcement. Retail sales remained unchanged at 12.6 percent.

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