Week in FX Asia – China Data Boosts Asian Currencies

The IMF has outlined the top three risks to global growth are as follows: US Fed QE tapering, Japanese monetary policy and Chinese low growth. This week Chinese factory output data beat expectations. Factory production increased 9.7 percent year over year. That along positive retail sales growth of 13 percent have given analyst enough to start talking about economic stabilization.

The numbers out of China boosted local markets and abroad. Confidence was restored in the China growth story which benefits commodity exporters such as Australia and Canada. Given the current US dollar weakness due to lack of clarity surrounding the possible end of QE, emerging markets appreciated versus the USD.

Bank of Japan Keeps Stimulus Unchanged

BoJ Governor Kuroda is still happy with the progress the Japanese economy has made in the last couple of months. Not enough to upgrade the assessment of a moderate recovery but sufficient to keep the current stimulus program at the same bond-buying pace.

The biggest comments this week was around the upcoming sales tax hike. Kuroda backs the plan even as the IMF among others point out that it will probably set Japan back in growth terms. The BoJ points to the economy supporting the hike, which is needed to repair public finances.


* CNY New Yuan Loans
* JPY Gross Domestic Product
* JPY Bank of Japan meeting minutes
* EUR German Consumer Price Index
* GBP Consumer Price Index
* EUR German Economic Sentiment
* USD Advance Retail Sales
* EUR German Gross Domestic Product
* GBP Bank of England Minutes
* EUR Euro-Zone Gross Domestic Product s.a.
* USD Consumer Price Index
* USD U. of Michigan Confidence

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza