Asia FX creeps higher on China GDP beat, M.East tensions weigh
Investing.com-- Most Asian currencies firmed slightly on Wednesday tracking a stronger-than-expected reading on Chinese economic growth, although fears of an escalation in the Israel-Hamas war limited any major gains.
Renewed fears of higher-for-longer U.S. interest rates also remained in play after a stronger-than-expected reading on retail sales for September, which markets feared could factor into stickier inflation.
Still, trade-heavy currencies, particularly those exposed to China, saw some gains following a strong reading on third-quarter gross domestic product (GDP). The Australian dollar rose 0.2%, as did the South Korean won and Taiwan dollar.
The Japanese yen was flat around 149 to the dollar, with focus remaining on a potential breach of 150, which is expected to attract currency market intervention by the government.
The Indian rupee languished above 83 to the dollar, facing renewed pressure from a spike in oil prices.
The Chinese yuan rose 0.1%, while the offshore yuan added 0.2% after data showed third quarter GDP grew more than expected. Quarter-on-quarter GDP growth also accelerated from prior quarter, indicating that some stimulus measures from Beijing were bearing fruit.
But underlying Chinese economic growth- while seeing some improvement, still remained largely below pre-COVID levels, with the third-quarter GDP figures only showing some signs of progress.
Optimism over the GDP reading was offset by persistent concerns over a debt default in China’s property sector, especially as beleaguered developer Country Garden (HK:2007) faces a repayment deadline this week.
Concerns over a renewed trade war with the U.S. also dampened optimism towards China, after the White House unveiled new curbs on the
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