Us Dollar On The Backfoot After Chinese Data

 Us Dollar On The Backfoot After Chinese Data

US Dollar On the Backfoot After Chinese Data Release

Wednesday's release of the Chinese data was better than the forecast & thus allowed the Chinese Yuan to reach a 1-week high. At the same time, the Chinese data also pushed the US Dollar on the back foot against the Yuan & other currencies.

The situation in the Middle East continues to escalate and is also affecting the US Dollar negatively. The outflow of funds from the US Dollar is finding its way into the Gold (XAU/USD), Yuan, & other assets.

As per the data, the economic growth of China during Q3 2023 was 1.3%, which is a step up from the 0.5% growth of Q2. At the same time, the Q3 growth was higher than the 1% forecast, which suggests that the Chinese economy is picking pace.

Industrial Output Jumps During Q3

During the Q3, the unemployment in China also fell while the industrial output received a much-needed boost. In simple words, the Chinese economic engine is now showing signs of recovery, and all the indicators give optimism to investors.

Given the current economic indicators of China, a UOB economist from Singapore said that the 5% growth target this year looks achievable. They also added that there is a chance that China's growth may be a little higher than the 5%.

After the data release, other currencies, such as the New Zealand Dollar (NZD) & Australian Dollar (AUD), also received a boost. When checked last time, the AUD was up by 0.2% and was trading near 0.6378, while the NZD also received the same percentage of boost.

The biggest highlight is the Yuan trading near 7.2905 against the USD and is sitting at a 1-week high. Although the pair has now moved to 7.306, it still signifies the strength of the Yuan.

A day earlier, the retail sales data from the USA pushed the yields higher and allowed the USD to gain the upper hand against the JPY. As a result, the USD/JPY rate was last seen near the 149.68, with only a few pips away from the 150.00.

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