The release of slightly better than expected Chinese economic data helped lift risk assets marginally in Asian trade Friday but these were subsequently reversed as players consolidated positions ahead of the weekend. The data showed Q4 GDP accelerated to +7.9% y/y from +7.4% in Q3, slightly above the median forecast of +7.8%, and bringing full-year growth to 7.8%, also just above the official target at around 7.5%, while marking the slowest year of expansion since the Asian Financial Crisis. “The data flow of recent weeks confirms that the PBOC can continue to remain on the sidelines,” commented local analyst. “Inflation and activity data are edging higher, and there is no immediate need for additional stimulus, monetary or fiscal. Fears of a hard landing can finally be set aside.” The Australian dollar was one of the major movers after the GDP data were released, spiking to $1.0550 from around $1.0530 but then sliding back minutes after. By the end of the morning here, aussie-dollar was at $1.0516 compared with last night’s U.S. close of $1.0546. It marked a $1.0512 to $1.0552 range through the morning. “From here, China is expected to return to a higher growth path above 8% for this year and next. This expectation has brought back yuan appreciation expectations,” noted analysts. Euro-dollar was last at $1.3376, just about where it had ended in the United States. The pair climbed to around $1.3378 from $1.3370 after the Chinese data release but like the aussie, gave back much of the gains soon after to slip to $1.3364. Dealers said offers around the $1.3400 mark continued to hamper the euro’s gains, keeping it away from any meaningful re-test of the 2013 high so far near $1.3404, posted last Friday. Dollar-yen meanwhile spent a lackluster morning holding well the lofty levels marked during last night’s U.S. session, when it hit a 31-month high of Y90.14. The pair was last at Y89.84 here, after trading between Y89.69 and Y90.08 through the Asian morning. Despite today’s pull-back, many traders continued to see scope for further gains toward the June 22, 2010, high around Y90.33 although beyond that, the pair would need to decisively clear Y90 and stay there before any chance of establishing a new Y90 to Y95 trading range. Japanese Finance Minister Taro Aso met today with Bank of Japan Governor Masaaki Shirakawa and Economy Minister Akira Amari, local media reports said. Aso declined to comment on what was discussed at the meeting, but the three are expected to have held talks on how to strengthen cooperation between the government and the BOJ in order to overcome Japan’s persistent deflation.
EasyForexNews Research Team