AUD/USD rises after the release of better-than-expected macroeconomic data from China, its largest trading partner.
Risk from China’s property sector, however, continues to undermine Iron Ore, Australia’s largest export.
The week promises volatility as both Australia and US’s central banks hold policy meetings.
AUD/USD is edging higher, trading in the 0.6570s on Monday, after the release of strong Chinese data showed higher-than-expected growth in Industrial Production, Retail Sales and Fixed Asset Investment, in February.
The data improves the outlook for Australia’s largest trading partner but is not enough to provide an antidote to China’s property sector woes. Construction is also more influential for the Australian Dollar (AUD) because Chinese property developers are the primary buyers of Australian Iron Ore, which they use to make the steel for large-scale construction projects.
These woes are reflected in a continued plunge in Iron Ore prices which have fallen from over $140.00 per tonne at the start of 2024 to around $102.50 at the time of publication. Iron Ore is Australia’s largest export and a fall in price translates into a decline in demand for the Australian Dollar (AUD) which is needed to purchase it.
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