AUD and NZD tumble as Chinese data miss
|The Australian and New Zealand dollar plunged on heavy selling pressures amid disappointing economic data from China. The Aussie fell almost 1% to 0.7160 against the greenback, the lowest level since early November, while the Kiwie gave up more 1.10% as it reached $0.6780. Overall, investors fled riskier assets and took shelter into safe haven currencies such as the Japanese. Interestingly, the Swiss franc fell 0.25% against the buck, which suggests that the recent slowdown in Switzerland’s economic growth has make the Swissie less attractive.
The last batch of data from the world’s second largest economy came on the soft side, suggesting that the downturn is deepening. The ongoing trade war between the US and China is undoubtedly part of the equation though. Chinese retail sales fell short of expectation as they rose only 8.1%y/y in November, missing estimates of 8.8% and down from 8.6% in October. Similarly, industrial production missed forecast as it came in at 5.4%y/y versus 5.9% previous reading and forecast. Overall, it seems that the combination of faltering market confidence, thanks to Donald Trump relentless attacks on China, together with the country’s ongoing economic slowdown due to the normalisation process that is underway - i.e. shifting toward a domestic generated growth from an export driven one – has hurt significantly China’s industrial sector.
Stay on top of the markets with Swissquote’s News & Analysis
On the bright side, the conflict between Xi Jinping and The Donald has seen appreciable amelioration lately as the 90-day truce gives both side a breath of fresh air. For now, investors would remain nervous against the backdrop of tumultuous financial market conditions and tense geopolitical situation. It is just not the right time to hold risky assets.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.