Market News & Analysis

Turbulent trading for Aussie after China rebound

Apr 18, 2019 | Market Update

High-impact economic news:

11:30 AUD Employment Change
11:30 AUD Unemployment Rate
17:15 EUR French Flash Services PMI
17:15 EUR French Flash Manufacturing PMI
17:30 EUR German Flash Manufacturing PMI
17:30 EUR German Flash Services PMI
18:30 GBP Retail Sales m/m
22:30 CAD Core Retail Sales m/m
22:30 USD Retail Sales m/m

It was a turbulent trading session for the Aussie and the Kiwi, after two very different economic reports. The start of the Asian session saw the release of New Zealand’s quarterly CPI data and it was anything but impressive. Inflation slowed to 0.1% in the March quarter for New Zealand, compared to a forecast of 0.3%. The weaker-than-expected read resulted in the Kiwi plunging to multi-week lows. The NZD/USD pair reached an intraday low of 0.6665 before closing the session at 0.6726, reversing gains from the previous three sessions. Against the Euro, the NZD closed the session 125 pips lower after initially plunging close to 250 pips. The extraordinary rebound was propelled by improved growth in China.

Defying market expectations, China’s economy grew 6.4% in the first quarter, in line with the previous quarter and compared to a forecast of 6.3%. Alongside the release of the GDP report was stronger-than-expected industrial production numbers. The total value of output produced by manufacturers, mines, and utilities in China rose 8.5% in March, against a forecast of 5.6%.

Not only did the Kiwi claw back losses on the Chinese data, but the Aussie edged higher too. Immediately after the release, the Aussie spiked above 72 US cents. But the rally wasn’t sustainable, with sellers forcing the AUD/USD to close less than 10 pips higher at 0.7177. The marginally increase, however, was enough to put the Aussie at a 7-week high against the greenback. The AUD/NZD saw the biggest gains, with the Aussie closing at its highest level since November 26.

Aside from the Kiwi, Gold was the biggest loser during Wednesday’s session, closing at its lowest level since December 27. The commodity fell for a fifth consecutive session, down US$2.56 to US$1,273.92 per ounce.

Traders are in for a big session tonight ahead of a raft of economic data, including retail sales numbers from the United States, Canada and the United Kingdom. France and Germany will also release manufacturing and services data, before the Good Friday public holiday.

Good trading from EightCap

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