Aussie Gains After Excessive Drop, Before China GDP Report
The Australian dollar rose from near its weakest level since September 2010 on speculation recent declines have been excessive and before China reports on its second-quarter gross domestic product.
The Aussie gained against all its 16 major peers, paring a drop against the group from late last week, after China’s official Xinhua News Agency corrected a report citing Finance Minister Lou Jiwei as saying the country’s growth target this year is 7 percent, lower than the official goal of 7.5 percent. Gains in the currency were limited before the Reserve Bank of Australia releases minutes of its July policy meeting tomorrow.
“There’s always a little nervousness before the China data,” said Stan Shamu, a Melbourne-based market strategist at IG Markets Ltd. “If we see a disappointing reading from China’s GDP, it will be another reason for the Aussie dollar to go through another round of selling.” Shamu recommends selling the currency if it rallies toward 91.60 cents.
The Australian dollar rose 0.4 percent to 90.86 U.S. cents as of 10 a.m. in Sydney from last week, when it fell as low as 89.99 cents. The currency climbed 0.4 percent to 90.13 yen. New Zealand’s dollar rose 0.3 percent to 78.04 cents and gained 0.2 percent to 77.42 yen.
The Aussie tumbled 10 percent in the past three months, the worst performer among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The kiwi slid 4.6 percent.
In an English-language story released July 13 and dated the previous day, Xinhua said it corrected a quote attributed to Lou to “there is no doubt that China can achieve this year’s growth target of 7.5 percent” from its original story dated July 11 that cited him as saying “there is no doubt that China can achieve the growth target, though the 7 percent goal should not be considered as the bottom line.”
GDP in the world’s second-largest economy may have expanded 7.5 percent in the April-June period from a year earlier, down from 7.7 percent in the first quarter, according to the median estimate of analysts surveyed by Bloomberg News ahead of today’s release.
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