Dollar Strengthens for Third Week, China GDP Ignored

18 Oct 2024 , 11:05 AM

On Friday, the dollar was on track for its third weekly gain in a row, boosted by a dovish European Central Bank and good US data that is pushing back predictions for how quickly US interest rates can fall, particularly if Donald Trump wins the president.

In Asia, a flood of economic data from China, including third-quarter growth estimates, elicited a tepid response from markets, but following comments from the country’s central bank revealing additional specifics of Beijing’s stimulus initiatives helped Chinese assets rally broadly.

The Australian dollar, which is commonly considered as a liquid proxy for the Chinese yuan, was recently up 0.12% at $0.6704.

The onshore yuan rose 0.06% to 7.1193 per dollar, while the offshore counterpart increased 0.1% to 7.1307.

Gains in the Chinese currency became more pronounced after the People’s Bank of China (PBOC) officially launched the Securities, Fund, and Insurance Swap Facility (SFISF) on Friday, and policymakers signalled the possibility of further monetary easing in addition to other support measures to prop up the ailing Chinese economy.

These came immediately after Friday’s data release, which showed China’s third-quarter GDP rates were somewhat higher than expected, while property investment declined by more than 10% in the first nine months of the year. Retail sales and industrial production increased in September.

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