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FIVE at FIVE AU: ASX and dollar strong as Chinese figures boost confidence

Published 15/09/2023, 02:39 pm
© Reuters.  FIVE at FIVE AU: ASX and dollar strong as Chinese figures boost confidence
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The S&P/ASX200 enjoyed a significant upswing today, gaining 113.40 points or 1.58% to 7,299.90 and crossing above its 200-day moving average as at 2:30pm this afternoon.

On these figures, over the last five days the index has gained 2.00% and is currently 3.54% off its 52-week high.

All sectors were in dull or bright green territory at time of writing, with Materials riding highest, up 2.96%, followed by Energy (2.03%) and Information Technology (1.54%), with the most sluggish performers of the bunch being Utilities and Healthcare, still both up 0.54% and 0.68% respectively.

Aussie dollar buoyant on China data

The Australian dollar saw an uptick of 0.4%, reaching US$0.6465, following better-than-anticipated economic figures from China and a surge in iron ore prices to their highest levels in half a year.

China's National Bureau of Statistics revealed a year-on-year industrial output expansion of 4.5% for August, outpacing July's 3.7% and exceeding the estimated 3.9% increase.

The data marks the swiftest rate of expansion since April. Likewise, retail sales for August grew by 4.6%, a jump that was helped by summer tourism and outperformed a predicted 3% rise.

The corresponding appreciation of the offshore yuan to 7.2624 against the US dollar underscores this apparently strengthening Chinese economy.

To paraphrase Klemens von Metternich, when China sneezes, Australia catches a cold. Its economic health directly influences the Australian dollar, often viewed as a liquid alternative to the yuan.

The encouraging Chinese data has breathed life into the dollar, which is now set for a weekly surge of 1.4%, its biggest leap in two months.

The development suggests that China's recent efforts to stimulate its economy are starting to yield results, impacting global currencies in the process.

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