Aussie Weakens on Poor China’s Data, Market Sentiment

The Australian dollar was soft today as the market sentiment remained negative following yesterday’s news about an attack on oil tankers in Middle East. Mixed macroeconomic data in China, Australia’s biggest trading partner, added to downside pressure on the currency. While some of the indicators were good, the arguably more important ones were surprisingly bad, suggesting that the Chinese economy struggles to maintain its impressive growth.
The National Bureau of Statistics of China released a bunch of important economic indicators for May today.
Fixed asset investment rose 5.6% in January-May from the same period a year ago, whereas economists were expecting the same 6.1% rate of growth as in April. Industrial production rose 5.0%, year-on-year, while analysts were also expecting the same pace of increase as in the previous month — 5.4%.
On a positive side, retail sales climbed 8.6%, exceeding the consensus forecast of an 8.0% increase and the previous month’s 7.2% growth. The unemployment rate remained steady at 5.0% in May, unchanged from April.
AUD/USD declined from 0.6914 to 0.6897 as of 10:45 GMT today. EUR/AUD rallied from 1.6304 to 1.6332, touching the high of 1.6363 intraday. AUD/JPY dropped from 74.92 to 74.63.

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