Euro fell early in the European session today as risk appetite was dampened by disappointing growth data from China.
The world’s second largest economy released quarterly GDP data today, showing that the economy grew 9.1 percent in the third quarter from a year earlier, the slowest pace since 2009, adding to concern that the global recovery is slowing due to a deepening euro zone debt crisis.
Growth was lower than estimates which were for a 9.3 percent increase, and lower than the previous quarter’s 9.5 percent growth.
China’s exports declined due to the global downturn and may continue to affect its exports in the coming months well into next year, bringing GDP growth even lower.
As Europe’s crisis deepens, this will reduce demand for China’s exports, consequently reducing China’s manufacturing and production.
Overseas sales rose less than expected in September as shipment growth to Europe halved and the customs bureau warned of “severe challenges” as the global outlook dims.
The Shanghai Composite Index fell 1.2 percent as of 10:56 a.m. local time. The MSCI Asia Pacific Index sank 2 percent. The Chinese yuan weakened 0.1 percent to 6.3782 per U.S. dollar. Most risk currencies fell on the news. AUDUSD lost over 100 pips so far today, touching as low as 1.0117 at 0730GMT. China is Australia’s main trading partner. Euro lost 95 pips against the dollar early in the European session.