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Chinese slowdown continues despite positive data - Societe Generale

FXStreet (Łódź) - Kit Juckes, Global Head of Currency Strategy at Societe Generale suggests that even though Chinese data, including GDP and Industrial Production numbers, came in slightly better than expected, the country's economy is still slowing down and raw material prices are falling.

Key Quotes

"All eyes were on Chinese economic data overnight, and they duly came out marginally better than expected. Real GDP growth slowed from 7.5% y/y to 7.3% but beat expectations of 7.2%."

"Industrial production growth picked up from 6.9% to 8% and retail sales slowed from 11.9% to 11.6%.The lack of drama in the data provided comfort for the region's currencies, and we have gains overnight for JPY, KRW, NZD and AUD."

"The picture below shows how iron ore prices have been trending lower in line with the GDP data and taking a step back, I think the important point is that China's slowdown continues and so too, does the downtrend in raw material prices."

"So while Asian currencies were helped today, in the slightly longer term, the rug has been pulled out from under some of the most overvalued resource-sensitive currencies, including AUD, NZD and to a lesser extent CAD."

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