The Australian dollar is climbing as Chinese economic data beats

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  • The Australian dollar rose against all major crosses on Wednesday, boosted by stronger-than-expected economic data from China.
  • Persistent concerns over a potential trade war between the US and China continue to influence broader financial market moves.
  • The data calendar is light both in Australia and abroad on Thursday.

The Australian dollar pushed higher on Wednesday, finding support from strong Chinese economic data and a weak US retail sales report for February.

Here’s the scoreboard at 7.50am AEDT.

AUD/USD 0.7878 , 0.0021 , 0.27%
AUD/JPY 83.76 , 0.04 , 0.05%
AUD/CNH 4.9687 , -0.0012 , -0.02%
AUD/EUR 0.6369 , 0.0029 , 0.46%
AUD/GBP 0.5642 , 0.0015 , 0.27%
AUD/NZD 1.0737 , 0.0014 , 0.13%
AUD/CAD 1.0203 , 0.0018 , 0.18%

In complete contrast to Tuesday where it fell against most major crosses, the Aussie outperformed on Wednesday, pushing higher following the release of stronger-than-expected Chinese industrial output and urban fixed asset investment figures for the first two months of the year.

After starting the session at .7857, the AUD/USD kept on grinding higher over the course of European and US trade, eventually hitting a high of .7916 on the back of a weak US retail sales report for February.

However, a firm US producer price inflation reading for February — reminding markets that upstream inflationary pressures are still building — along with renewed concern over a potential trade war between the US and China eventually took its toll on the Aussie, seeing it slip back below the 78 cent level.

“The White House confirmed it wants to reduce the US trade deficit with China by $100 billion, following Tuesday’s reports on the administration’s plans to impose trade tariffs on $60 billion of imports from China,” said Rodrigo Catril, currency strategist at the National Australia Bank.

“Meanwhile, a Chinese foreign ministry spokesman said ‘if the United States takes actions that harm China’s interests, China will have to take measures to firmly protect our legitimate rights’.”

AUD/USD 30-Minute Chart

Against the crosses, the Aussie put in a stronger showing against the Euro, the latter weighed down by remarks from ECB president Mario Draghi that recent gains in the euro weren’t all warranted by economic fundamentals.

Looking to the day ahead, it promises to be another one where headlines and speculation over trade and tariffs will dominate given a light data calendar in Asia.

There’s no major releases scheduled in Australia with the only real highlight coming from New Zealand with the release of Q4 GDP at 8.45am AEDT.

On a production basis, growth of 0.7% is expected for the quarter, seeing the year-on-year rate accelerate to 3.1% from 2.7% in Q3.

Later in the session, data highlights include French CPI along with import and export prices, Philadelphia Fed manufacturing survey, NAHB home builder sentiment and weekly jobless claims from the US.

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