The Australian dollar has pushed higher today after coming close to a new 7 year low, and brushing off weaker than expected data from China.
At 4.52pm (AEDT) the Aussie dollar was trading at US 69.01c up from US69.64c in yesterday’s trade.
Quarterly GDP figures out of China hit the market earlier today at 1.6 percent against analysts’ expectations for a figure of 1.7 percent, while the yearly figure released showed a number of 6.8 percent and in line with expectations.
After initially falling on the news, the Australian dollar recovered strongly, pushing back up through the US69c mark as Asian equities rallied and the Chinese central bank fixed the Yuan against the US dollar a little stronger than the market had anticipated.
In the 2nd half of 2015 many analysts were predicting that the Reserve Bank of Australia would need to cut interest rates further in 2016 in order to bolster the economy and help bring the Aussie dollar down to the RBA’s preferred level of around US70c.
The market may have done RBA governor Glenn Stevens a favour by forcing the currency lower, as many now see interest rates in Australia remaining on hold throughout the year.
Keeping rates unchanged may help put a lid on the property bubble and help the Australian economy as it transcends from the mining boom into industries such as tourism and services.