Following the release of high-impact economic data for October, China’s National Bureau of Statistics (NBS) provided an optimistic outlook during its press conference on Friday, which included several key takeaways that are likely to influence global markets, particularly commodity currencies like the Australian Dollar (AUD).
Key Quotes from the NBS:
Consumer Expectations: The NBS noted that China’s consumer expectations improved in October, signaling rising confidence in the economy.
Policy Adjustments: The government is committed to stepping up policy measures and expanding domestic demand to support the economy further. These efforts are aimed at consolidating the trend in economic recovery.
Positive Effects of Recent Policies: The NBS highlighted that recent economic policies have had a positive impact, and there is increasing confidence in achieving the 2024 growth target.
Domestic Demand: While progress is being made, the NBS acknowledged that domestic demand remains insufficient and will require further efforts to stimulate.
Property Market Stabilization: There is growing optimism about the property market, with signs that property prices are stabilizing, and cash flows of developers are improving.
Inflation Outlook: The NBS expects consumer prices to maintain modest increases, indicating that inflation pressures remain under control.
Consumption Growth: While consumption growth is constrained, the government is focusing on boosting household incomes and promoting trade-ins for consumer goods.
Market Reaction: The market responded positively to China’s economic outlook. The Australian Dollar (AUD/USD) extended its gains above the 0.6450 level, up 0.18% on the day. As China is Australia’s largest trading partner, any positive news regarding China’s economic recovery tends to support the Australian Dollar, particularly in relation to commodities and trade flows.
The outlook from China’s NBS suggests that despite some ongoing challenges, the government’s policy support and economic recovery efforts are making headway, which could provide a boost to global sentiment and strengthen the AUD in the near term.
AUD/USD Technical Outlook: With the market reacting positively to China’s outlook, the Australian Dollar could continue to show strength, with potential resistance near the 0.6500 level. A sustained move above this could see further upside toward 0.6550 or 0.6600. On the downside, support is likely to be found at 0.6400, with a break below that level possibly leading to further declines.
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