Why does economic data from China affect the Aussie dollar? Australia has a trade-to-GDP ratio exceeding 50%, with one-third of Australian exports going to China. Weaker demand from China could slow the Aussie economy, affecting the RBA rate path and Aussie dollar demand.
Other data from China, including unemployment, retail sales, and industrial production, will highlight whether China’s economy gathered momentum heading into Q4. Positive trends could cushion the impact of weaker Q3 growth on the Aussie dollar.
Nevertheless, weaker-than-expected data could drag the AUD/USD toward $0.66500. On the other hand, better-than-expected figures may drive the pair to $0.67500.
Australian Dollar Daily Chart
Despite Thursday’s rally, the AUD/USD remains below $0.67. FOMC member speeches will likely overshadow US housing sector data in the US session.
Fed reaction to Thursday’s robust US retail sales and labor market data will influence AUD/USD trends. Hawkish comments could pull the AUD/USD toward the key support level at $0.66500. However, calls for rate cuts in November and December could push the AUD/USD toward $0.67500, a key resistance level. Breaking above $0.67 will be crucial for sustaining upward momentum.
