In the first quarter of 2013 China’s economy has slowed to 7.7% compared to the previous quarter of 7.9%. With analysts expecting a figure of 8% the data has come as a shock to the markets. Further Chinese growth has now hit the lowest in 13 years. With their growth having averaged close to 10% for the last 30 years the recent few months have signaled that things could be coming to an end. With Australia’s economy heavily reliant on Chinese growth we could see some weakness for AUD exchange rates this week.
This morning Sterling has increased against the Australian Dollar by 0.7% or over AUD$500 or a £50,000 currency transfer. The Australian stock market has also been negatively hit with over AUD$14bn wiped off the ASX, the worst single day in a month. Many of the companies involved in the mining sector have been hit hard by the news from China.
The poor data from the world’s second largest economy will be on the radar of the Reserve Bank of Australia who will have to decide what to do with interest rates at their next policy meeting due in early May. One thing is for sure though is that although the numbers are below forecast expectations they are still considerably better than how the rest of the developed world is performing. With the UK in danger of negative growth as of April 25th when the UK GDP figures are released we could see some potential falls for the Pound once the data is released. Currently with GBPAUD knocking on the door of 1.47 I personally feel that this is a good short term opportunity to secure Aussie Dollars compared to where we have been over the last few weeks.
To get in touch or if you would like to obtain a free quote please email me directly Tom Holian [email protected]