When is the China quarterly GDP and how could it affect AUD/USD?
China quarterly GDP Overview
The National Bureau of Statistics of China (NBS) will publish its data at 02.00 GMT on Monday. China quarterly GDP is estimated to grow 1.0% in the fourth quarter (Q4), compared to an expansion of 1.1% in Q3. On an annual basis, the Chinese economy is forecast to expand 4.4% versus 4.8% prior.
The GDP data is a measure of the total value of all goods and services produced in China during a given period. The GDP is considered as the main measure of China’s economic activity.
Meanwhile, Retail Sales are expected to show an increase of 1.2% year-over-year (YoY) in December, compared to 1.3% in the previous reading. Industrial Production is projected to show a rise of 5.0% YoY in the same period versus 4.8% prior.
How could the China quarterly GDP affect AUD/USD?
AUD/USD trades on a negative note on the day in the lead up to the China quarterly GDP, Retail Sales and Industrial Production data. The pair loses ground as the US Dollar strengthens after improving US labor market data have pushed back expectations of further Federal Reserve (Fed) rate cuts until June.
If data comes in better than expected, it could lift the Australian Dollar (AUD), with the first upside barrier seen at the January 15 high of 0.6710. The next resistance level emerges at the January 13 high of 0.6727, en route to the January 7 high of 0.6767.
To the downside, the January 9 low of 0.6663 will offer some comfort to buyers. Extended losses could see a drop to the December 8 low of 2024 at 0.6614. The next contention level is located at the 100-day Exponential Moving Average (EMA) of 0.6595.
Economic Indicator
Gross Domestic Product (QoQ)
The Gross Domestic Product (GDP), released by the National Bureau of Statistics of China on a quarterly basis, is a measure of the total value of all goods and services produced in China during a given period. The GDP is considered as the main measure of China’s economic activity. The QoQ reading compares economic activity in the reference quarter to the previous quarter. Generally, a high reading is seen as bullish for the Renminbi (CNY), while a low reading is seen as bearish.
Read more.GDP FAQs
A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022. Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.
A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency. When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.
When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.
Author
Lallalit Srijandorn
FXStreet
Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.
