China retail data gives dollar a leg-up
THE Australian dollar moved higher after Chinese economic data showed strong growth in the country's retail sector.
THE Australian dollar moved higher after Chinese economic data showed strong growth in the country's retail sector.Late yesterday the dollar was trading at US104.25?, up from US104.07? on Thursday. It slipped as low as US103.79? in early trading following a sharp fall in US stocks overnight.ANZ foreign exchange strategist Andrew Salter said the currency strengthened during the Asian session. "The overall theme of the day is that it [the Aussie dollar] has been pretty well supported," he said.The dollar also received a boost late yesterday following the release of Chinese economic data, which showed retail spending in the world's second largest economy rose 14.5 per cent in the year to October, while fixed asset investment rose 20.72 per cent in the first 10 months of 2012.Mr Salter said the dollar had also shrugged off news the Reserve Bank of Australia had downgraded its forecasts for GDP growth for 2013.In its quarterly statement on monetary policy, the RBA said it was now forecasting GDP growth of 3 per cent in 2013, down from its forecast of 3.75 per cent growth in 2012.Meanwhile, bond futures prices were higher, as markets remained concerned about the US economy.The December 10-year bond contract was trading at 96.975 (implying a yield of 3.025 per cent), up from 96.925 (3.075 per cent) on Thursday. The three-year contract was at 97.430 (2.570 per cent), up from 97.390 (2.610 per cent).Commonwealth Bank head of debt research, Adam Donaldson, said investors were concerned about how US president Barack Obama would deal with the looming fiscal cliff.However, commentary from the Reserve Bank yesterday had pushed bond prices down slightly."They downgraded their growth forecasts, but that was expected," he said. "The market has come back somewhat from its highs, since the tone of their statement was more balanced."