SINGAPORE- Asia’s trade-exposed currencies inched higher on Monday as China’s rebound from the COVID-19 pandemic stayed on course last quarter, even as caution about the US election outcome kept the US dollar supported against other majors.
China’s gross domestic product grew 4.9 percent in the September quarter from a year earlier, slower than forecast but faster than the third quarter and aided by strong gains in industrial output and an acceleration in retail sales.
The yuan and risk-sensitive Australian and New Zealand dollars dipped from session highs after the GDP headline miss, but stayed bought on views the consumption data was a harbinger of better growth in the current quarter.
The yuan was last steady in onshore trade at 6.6982 per dollar, after hitting a fresh 18-month peak of 6.6852 in morning trade.
The Aussie and kiwi both edged 0.1 percent higher, trimming earlier gains as last week’s dovish central bank remarks remain a weight on the Antipodeans. “The (Chinese) GDP numbers came in slightly below expectations, but the monthly data shows there is no reason to be overly pessimistic,” said Yoshiko Shimamine, chief economist at Dai-ichi Life Research Institute in Tokyo.
“China’s economy remains on the recovery path, driven by a rebound in exports. Consumer spending is also headed in the right direction, but we cannot say it has completely shaken off the drag caused by the coronavirus.”
Industrial output in September expanded 6.9 percent from a year earlier, while retail sales grew 3.3 percent, both well ahead of expectations.
The dollar was broadly stable elsewhere, with investor worries about rising coronavirus cases, the looming US election and fading prospects of any fiscal stimulus beforehand providing support.