China’s economy expands 1.3% QoQ in Q1 2026 as expected
China’s economy expanded 1.3% QoQ in the first quarter (Q1) of 2026, compared to a 1.2% growth in Q4 of 2025, the official data published by the National Bureau of Statistics (NBS) showed on Thursday. The figure came in line with the market consensus.
On an annual basis, the Chinese Gross Domestic Product (GDP) rate rose 5.0% in Q1 after advancing 4.5% in the previous quarter, stronger than the market expectation of 4.8% print.
China’s annual March Retail Sales increased by 1.7% versus 2.3% expected and 2.8% prior, while Industrial Production came in at 5.7% versus 5.5% estimate and February’s reading of 6.3%.
Meanwhile, the Fixed Asset Investment increased 1.7% year-to-date (YTD) in March vs. a rise of 1.9% expected and an increase of 1.8% in the previous reading.
AUD/USD reaction to China’s data dump
The Australian Dollar (AUD) edges slightly higher in an immediate reaction to the China’s GDP and activity data. At the time of press, the AUD/USD pair is down 0.06% on the day at 0.7165.
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.03% | -0.06% | -0.14% | -0.10% | -0.10% | 0.06% | -0.08% | |
| EUR | 0.03% | -0.03% | -0.09% | -0.06% | -0.07% | 0.06% | -0.04% | |
| GBP | 0.06% | 0.03% | -0.04% | -0.04% | -0.03% | 0.10% | -0.01% | |
| JPY | 0.14% | 0.09% | 0.04% | 0.03% | 0.05% | 0.13% | 0.06% | |
| CAD | 0.10% | 0.06% | 0.04% | -0.03% | 0.01% | 0.14% | 0.03% | |
| AUD | 0.10% | 0.07% | 0.03% | -0.05% | -0.01% | 0.12% | 0.04% | |
| NZD | -0.06% | -0.06% | -0.10% | -0.13% | -0.14% | -0.12% | -0.11% | |
| CHF | 0.08% | 0.04% | 0.01% | -0.06% | -0.03% | -0.04% | 0.11% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
This section was published on Wednesday at 23:44 GMT as a preview of China's quarterly GDP data.
China quarterly GDP Overview
The National Bureau of Statistics of China (NBS) will publish its data at 02.00 GMT on Thursday. China quarterly GDP is estimated to grow 1.3% in the first quarter (Q1), compared to an expansion of 1.2% in Q4. On an annual basis, the Chinese economy is forecast to expand 4.8% versus 4.5% 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 2.3% year-over-year (YoY) in March, compared to 2.8% in the previous reading. Industrial Production is projected to show a rise of 5.5% YoY in the same period versus 6.3% prior.
How could the China quarterly GDP affect AUD/USD?
AUD/USD trades on a positive note on the day in the lead up to the China quarterly GDP, Retail Sales and Industrial Production data. The pair gains ground as the US Dollar weakens amid optimism over the ceasefire between the US and Iran.
If data comes in better than expected, it could lift the Australian Dollar (AUD), with the first upside barrier seen at the March 11 high of 0.7187. The next resistance level emerges at the 0.7200 psychological level, en route to the August 29, 2024 high of 0.6824.
To the downside, the April 10 low of 0.7054 will offer some comfort to buyers. Extended losses could see a drop to the 0.7000 psychological level. The next contention level is located at the 100-day Exponential Moving Average (EMA) of 0.6900.
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
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.
