Forex Review – Australian dollar recovers after weak China GDP

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EURUSD bounced off an early Asian session low of 1.3723 and retraced slightly after reaching key support levels from a 1 percent decline yesterday following pessimistic news about the euro zone debt crisis not being resolved soon. Euro dipped again after third quarter China GDP showed slower growth than expected in the world’s second largest economy. EURUSD quickly rebounded up to a session high of 1.3787.

 

GBPUSD opened in Asia at 1.5746 and regained some ground to climb to 1.5820, unaffected by weak Chinese growth data. Sterling also gained against the euro, as EURGBP dipped 27 pips to a low of 0.8707.

 

USDJPY opened in Asia at 76.81 and was little changed as it still consolidated after a huge drop yesterday when the U.S. dollar plummeted against the Japanese yen due to uncertainty surrounding the upcoming meeting of European finance officials and the prospects for action on the euro-zone’s debt crisis.

 

AUDUSD opened in Asia at 1.0153 after falling 2 percent yesterday in a risk-off market. The aussie was due for correction and retraced back up with a slight dip after the Reserve Bank of Australia’s policy meeting minutes. As speculated, the bank made clear that it felt inflation was now less of a worry, cementing market expectations for an interest rate cut as early as next month. AUDUSD continued higher but was brought down again to 1.0161 after China growth data disappointed. China grew 9.1 percent in the third quarter from a year earlier, the slowest pace since 2009, affected by a slowing global economy and Europe’s debt crisis. China is a major trading partner for Australia. AUDSD soon recovered and rose to 1.0221.