Australian Dollar Rises On Upbeat China Q1 GDP Data

(RTTNews) - The Australian dollar strengthened against other major currencies in the Asian session on Tuesday, as China's economy grew more than expected on year in the first quarter of 2023.

Data from the National Bureau of Statistics showed that China's gross domestic product was up 4.5 percent on year in the first quarter of 2023. That beat expectations for an increase of 4.0 percent and was up from 2.9 percent in the three months prior.

On a seasonally adjusted quarterly basis, GDP gained 2.2 percent, matching forecasts following the flat reading in the previous quarter.

The bureau also said that industrial production was up 3.9 percent on year in March, missing expectations for 4.0 percent but still up from 2.4 percent in February.

Retail sales jumped an annual 10.6 percent, beating forecasts for 7.4 percent and up from 3.5 percent in the previous month.

Fixed asset investment rose 5.1 percent on year, shy of expectations for 5.7 percent and down from 5.5 percent a month earlier.

The jobless rate came in at 5.3 percent, beneath forecasts for 5.5 percent and down from 5.6 percent in February.

Half-an-hour earlier before the china data, the Australian dollar started rising on optimism led by RBA monetary policy meeting minutes.

Members of the Reserve Bank of Australia's Monetary Policy Board decided to leave its cash rate target unchanged at 3.60 percent in order to assess the full impact of the cumulative 350 basis points increase since last May, minutes from the central bank's April 4 monetary policy meeting revealed.

"The Board's decision to increase the cash rate in March had been widely anticipated and the accompanying communication had moderated expectations for future increases.", the RBA minutes stated.

The Board also acknowledged that consumer prices remain higher than desired. That being said, the members reiterated their determination to return inflation to target.

In the Asian trading today, the Australian dollar rose to near 1-1/2-month highs of 90.43 against the yen and 1.0863 against U.S. dollar, from yesterday's closing quotes of 90.06 and 1.0836, respectively. If the aussie extends its uptrend, it is likely to find resistance around 94.00 against the yen and 1.11 against the kiwi.

The aussie advanced to nearly a 2-week high of 1.6260 against the euro, from yesterday's closing value of 1.6306. On the upside, 1.58 is seen as the next resistance level for the aussie.

Against the U.S. and the Canadian dollars, the aussie climbed to 4-day highs of 0.6725 and 0.8999 from yesterday's closing quotes of 0.6700 and 0.8972, respectively. The next resistance level for the aussie is seen at 0.70 against the greenback and 0.92 against the loonie.

Looking ahead, U.K. jobs data for February is due to be released at 2:00 am ET.

Eurozone ZEW economic sentiment index for April is slated for release at 5:00 am ET.

In the New York session, Canada CPI data for March, U.S. housing starts and building permits data for March are due to be released.