China GDP Q2 overview:
Today, China releases its GDP data for Q2 at 0200GMT. China's economy is estimated to have grown 6.8 percent in the second quarter of 2017, with some analysts arguing that China's economy will remain stable but with a slight slowing trend. China's economy grew 6.9 percent in Q1 from a year earlier, slightly faster than expected. This was supported by a government infrastructure spending spree and a housing market that has shown signs of overheating. Casting our minds back, Premier Li Keqiang said during the annual meeting of parliament in March that the nation is aiming to expand its economy by around 6.5 percent this year.
How could the Chinese GDP affect AUD/USD?
Given that China has shown steady growth in the economy, an inline number should be supportive of the Aussie given how much China invested last year down under. China's investment surged by 11.5% in 2016 to $11.5b amid booming demand for agricultural assets and infrastructure projects, and a record number of deals were signed with Chinese companies. AUD/USD has eyes on the 2015 high near 0.8165 on a break of 0.8000 according to analysts at Brown Brothers Harriman. 0.7834 is the resistance and April 2016 highs as a key level in the near term; A break of here would be significant. Otherwise, a triple top scenario could be carved out on a denoting miss, with the 14th July low at 0.78 the figure as a meaningful target. The detail of the miss would be key to such an event; Growth may be inhibited due to the worsening labour and debt conditions amid deepening cuts in excess industrial capacity. However, the US dollar is out of favour currently and this week holds key Aussie jobs data. Moves on Chinese GDP may be limited whichever way the event plays out.
Key notes:
AUD/USD a star performer, sights on the 2015 high near $0.8165 - BBH
US CPI: inflation below expectation in June - Wells Fargo
The Gross Domestic Product (GDP) released by the National Bureau of Statistics of China studies the gross value of all goods and services produced by China. The indicator presents the pace at which the Chinese economy is growing or decreasing. As the Chinese economy has an influence on the global economy, this economic event would have an impact on the Forex market. Generally speaking, a high reading is seen as positive (or bullish) for the CNY and AUD, while a low reading is seen as negative (or Bearish).
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