Yesterday, China’s first-tier economic data showed mixed signals of the world’s second-largest economy and failed to bring out a strong response from the Aussie dollar pair.
Represented by Retail Sales, China’s consumer spending rose 5% year-on-year in November versus 5.2% expected and 4.3% previous. Industrial Production rose versus 7% as expected, following October’s 5.9%.
While an increase on the factory output is good for the commodity-sensitive Australian Dollar, so far, the pair has struggled to gather upside traction. This is probably because markets are forward-looking and might be worried about rising prospects of the economically-painful hard Covid-19 lockdowns across the western world. What’s more, the weak Retail Sales number weakens the China economic rebound story.
The AUD/USD continues to trade largely unchanged on the day near 0.7520, having printed a high of 0.7546 in the early Asian session.
The Reserve Bank of Australia’s December meeting minutes released early Tuesday, showed that policymakers stand prepared to further boost stimulus, if required. The dovish tone, on the other hand, failed to move the Aussie.
Although the pullback, we remain bullish on the AUD/USD pair. On the downside, look out for a breach of the 0.7500 price level for further losses.
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