Investing.com – The Dollar was broadly lower in early European trade Wednesday, after the release of China’s economic growth slightly faster than expected in the first quarter, which has encouraged a new rise in foreign currency raw materials.
At 10: 00, the Dollar Index, which measures the greenback against a basket of six major currencies, flirted with a minimum of three weeks to 96,512, down 0.1% from Tuesday evening in Europe.
The office chinese statistics had said earlier that the gross domestic product had increased from 6.4% in the first quarter compared to the previous year, which is slightly higher than the 6.3% expected. This can be explained by signs of a strong recovery in industrial production and retail sales in march, which suggests that the two main pillars of the chinese economy responded positively to stimulus measures of the government.
The chinese Yuan reached a peak of four weeks against the Dollar after the news, but the biggest increase was that of the pair AUD/USD, which has increased from 0.35% to its highest level since February, while traders had forecast a scenario that is more optimistic for the demand for raw materials in China.
Amy Yuan Zhuang, analyst at Nordea Markets, said that it was still too early to speak of a reversal of the situation in China, and that it was expected that the authorities have kept in place all the recent stimulus measures.
“A double-dip growth is the last thing Beijing needs in the context of ongoing trade negotiations with the United States, and the next 30 year anniversary of the Tiananmen protest Square,” she said.
The Euro has also bounced back after having slipped on Tuesday, smoothing over 1,1300 dollars this morning. The british Pound has continued to slide, while the suspension of parliamentary interromp any significant progress on the Brexit.
The Dollar, however, appreciated against the Yen and the kiwi. The governor of the Bank of Japan, Haruhiko Kuroda, said on CNBC that he intended always to continue easing the monetary policy, while data on inflation lower-than-expected encourage those who think that the next change of rates of the Reserve Bank of New Zealand will be to the downside.