AUD/USD drops on dovish RBA minutes, mixed China data offer little help
- RBA sees little reason for a near-term rate move, AUD turns red.
- China first-quarter GDP rises 6.8 percent.
- China industrial production drops more than expected in February, while retail sales beat estimates.
The Aussie dollar is reporting marginal losses, courtesy of the dovish RBA minutes.
The AUD/USD pair fell from 0.7787 after the RBA minutes showed the policymakers see little reason for a near-term rate move and cited high household debt and China debt as a risk to the Australian economy.
As of writing, the currency pair is trading at a session low of 0.7760. The China data released a few minutes ago has done little to put a floor under the Aussie dollar.
The world's second-largest economy expanded 6.8 percent year-on-year in the first quarter, beating the estimated slowdown to 6.7 percent, the official data showed. However, the industrial production printed at 6% year-on-year in February vs 6.2 percent expected. Meanwhile, consumption, as represented by retail sales, increased 10.1 percent, beating the estimate of 9.9 percent and up from the previous month's print of 9.7 percent.
The currency pair will likely remain under pressure in Europe as traders may price-in the delay in RBA tightening. Also, action in the equity markets could influence the Aussie dollar.
AUD/USD Technical Levels
Acceptance below the 5-day moving average (MA) lined up at 0.7762 could yield a deeper drop to 0.7733 (10-day MA) and possibly to 0.77 (psychological support). On the higher side, a convincing break above 0.7791 (100-day MA) would expose the 200-day MA of 0.7814. A close higher would signal an upside break of the falling channel and allow stronger rally towards 0.7916 (March 14 high).
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
