Forex Asia Review – Aussie rallies after China GDP

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Euro was steady in the Asian session, hovering near a two-year low. The single currency dipped briefly after Moody’s cut Italy’s credit rating but soon recovered some losses after China GDP data which showed it met second-quarter growth expectations.

EURUSD opened in Asia at 1.2201 and dipped to a low of 1.2180 on the new of Italy’s downgrade by two notches. China GDP brought the pair back up to 1.2212.

GBPUSD did little in Asia, swaying between 1.5414 and 1.5443, consolidating losses made after sterling’s sharp drop yesterday.

USDJPY ended flat after see- sawing from 79.23 to 79.38 then back down. Yen has maintained strength after the Bank of Japan refrained from further monetary easing after its policy meeting yesterday.

Aussie rallied after the satisfactory China GDP data. China is Australia’s single largest export market. AUDUSD rose to a high of 1.0173 from 1.0121 after the data.

Looking ahead of the economic calendar, focus shifts to an Italian bond auction later in the Europe session. The Moody’s downgrade has come at a bad time before Italy’s sale of 5.25 billion euros of debt.