The Australian dollar picked up a slight bid on Wednesday after a slew of data out of China beat expectations, fuelling hopes of a turning point for Asia’s economic powerhouse.
The Aussie, often used as a liquid proxy for China plays, climbed to a high of $0.7489, having earlier been as low as $0.7437. It was last up 0.2 percent at $0.7468.
China’s annual growth rate held at 7.0 percent in the second quarter, defying expectations for a slowdown to 6.9 percent. Retail sales and industrial output for June also came in ahead of forecasts.
“It was better than expected right across the board, so the Aussie has obviously rallied on the back of that and the kiwi less so. It was a commodity currency friendly outcome,” said Annette Beacher, chief Asia-Pacific macro strategist at TDSecurities in Singapore.
The Aussie was firmer against its peers as well, rising 0.4 percent to 92.20 yen, while the euro eased 0.4 percent to A$1.4712. Against the New Zealand dollar, the Aussie put on 0.5 percent to NZ$1.1134.
The kiwi was a touch firmer on the greenback at $0.6711 , after managing a high of $0.6724. It faced considerable risk from local data as well as a dairy auction in the next 24 hours.
“The outlook is not positive, with more RBNZ interest rate cuts looming and this means any rallies will remain short lived,” said Derek Rankin of Rankin Treasury Advisory.
Near term support is seen initially at $0.6680, with resistance at $0.6743.
The first test for the currency will come from a dairy auction, which analysts expect to show weaker prices.
Second-quarter inflation data due on Thursday is expected to show subdued price pressures overall, which will leave the central bank free to cut rates again next week.
New Zealand government bonds were little changed, while Australian bond futures turned negative in the wake of the Chinese data.
The three-year contract slipped 2 ticks to 97.930, while the 10-year edged down 1.5 ticks to 96.9200.