Forex News: Australian Dollar Extends Fall On Disappointing Chinese Econ

Australian Dollar Extends Fall On Disappointing Chinese Economic Data

(RTTNews) - The Australian dollar extended its recent weakness against other major currencies in the Asian session on Tuesday, after the release of data from the Chinese economy showing that growth in retail demand and production at a slower pace.

Data from the National Bureau of Statistics showed that retail sales jumped an annual 18.4 percent, missing forecasts for 21.0 but still up from 10.6 percent in the previous month. Industrial output in China was up 5.6 percent on year in April. That was also well shy of expectations for a gain of 10.9 percent but up from the 3.9 percent increase in March.

Fixed asset investment was up 4.7 percent on year, lower than the expectations for 5.5 percent and down from 5.1 percent a month earlier. The unemployment rate came in at 5.2 percent, beneath forecasts for 5.3 percent, which would have been unchanged from the March reading.

The Australian dollar fell slightly half-an-hour earlier, after the release of RBA minutes indicating that a rate hike was announced due to inflation risks.

The Reserve Bank of Australia Governor Philip Lowe raised interest rates unexpectedly by 25 basis points to 3.85 percent in the May's monetary policy meeting and signaled more hikes to bring inflation back to the target in a reasonable timeframe.

Members of the Reserve Bank of Australia's Monetary Policy Board acknowledged that there are still significant uncertainties surrounding the country's economic outlook, minutes of the board's May 2 meeting revealed.

In the Asian trading today, the Australian dollar fell to a 4-day low of 1.0702 against the NZ dollar from yesterday's closing value of 1.0733. The aussie may test support near the 1.04 region.

Moving away from a recent 4-day high of 0.6709 against the U.S. dollar, the aussie slid to 0.6680. On the downside, 0.65 is seen as the next support level for the aussie.

Against the euro and the yen, aussie edged down to 1.6271 and 90.82 from yesterday's closing quotes of 1.6223 and 91.18, respectively. If the aussie extends its downtrend, it is likely to find support around 1.66 against the euro and 88.00 against the yen.

The aussie dropped to 0.9004 against the Canadian dollar, from yesterday's closing value of 0.9021. The next possible support level for the aussie is seen around the 0.89 area.

Looking ahead, U.K. unemployment data for March is due to be released at 2:00 am ET.

In the European trading, Eurozone first quarter GDP data and German ZEW economic sentiment index for May are slated for release.

In the New York session, Canada CPI for April, U.S. retail sales data for April, industrial production for April and U.S. NAHB housing market index for May are scheduled for release.

At 8:15 am ET, Federal Reserve Bank of Cleveland President Loretta Mester will deliver a speech in person before the Global Interdependence Center "Central Banking Series: Dublin" event, in DUBLIN, Ireland.

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