Posted by William C on Aug 07, 2012
The Australian dollar has closed lower, after the release of disappointing Chinese trade figures.
At 1700 AEST on Friday, the local unit was trading at 105.23 US cents, down from 106.00 cents on Thursday.
Commonwealth Bank currency strategist Joseph Capurso said the currency had been hit hard by Chinese data, which showed weakness in trade and new bank loans.
“The trade figures showed that imports from China weakened considerably,” he said.
“The other thing was Chinese new loans, which were significantly lower than expected – just over half what they were last month.
“All of that got people worried about China, and since the Aussie dollar is so closely linked to China, it fell quite a bit today.”
Chinese banks extended 540.1 billion yuan of new local-currency loans in July, the Peoples Bank of China said on Friday – this fell well short of the market expectation for 690 billion yuan.
The release on Friday of the Reserve Bank of Australia’s Statement on Monetary Policy had not impacted the market much, although it hinted that a strong Australian dollar could affect the domestic economy and keep inflation low.
Commentary on the strong currency and its impact had been made before, and was nothing to worry about, Mr Capurso said.
“I don’t think the RBA’s going to intervene in the exchange rate,” he said.