Aussie Dollar Drops After Weak GDP Data

Wednesday,   05-Dec-2018   11:44 AM (IST)

The Aussie dollar declined on Wednesday in Asia after data showed the country’s economy expanded less than expected in the three months through September. Gross domestic product rose 0.3% from the second quarter, the statistics bureau said on Wednesday. Analysts previously expected GDP to rise 0.6%. On Tuesday, The Reserve Bank of Australia kept interest rates at a record-low 1.5% as expected. The AUD/USD pair declined 0.7% to 0.7291 by 11:34PM ET (04:34 GMT). Meanwhile, the yuan dropped against the dollar even after China’s November services PMI came in at a five-year high of 53.8, beating the forecasted 50.8 by a significant margin. The USD/CNY pair last traded at 6.8679, up 0.4%. The People's Bank of China (PBOC) set the yuan reference rate at 6.8476 vs the previous day's fix of 6.8939. The U.S.-China trade war remained in focus after China’s Ministry of Commerce released its first official statement following a meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping over the weekend. Beijing said the trade meeting with the U.S. was “very successful” but did not provide any further details on the outcome of the meeting. The U.S. dollar index that tracks the greenback against a basket of other currencies edged up 0.2% to 97.072. The safe-haven dollar gained after U.S. stocks slumped over 3% overnight. The plunge in U.S. stocks came after top White House economic adviser Larry Kudlow backtracked from U.S. president Donald Trump’s announcement that Beijing had agreed to reduce tariffs on U.S.-made cars.