The Australian dollar barely moved on Monday as China's economic growth data came in line with expectations, while its New Zealand cousin drifted to two-week lows. The Australian dollar, a liquid proxy for the Chinese yuan, was last at $0.7166 from Friday's $0.7164 as official figures confirmed fears Asia's largest economy was losing momentum.
In New Zealand, the local dollar fell to $0.6717, a level not seen since Jan.8. It was last down 0.3 percent at $0.6721. Last week, the Aussie ended down 0.7 percent as growing signs of weakness in China - which has generated nearly a third of global growth in the past decade - are stoking worries about risks to the world economy.
The Aussie has been trading between $0.7110 and $0.7235 over the past two weeks. Analysts expect this trend to continue until some tangible progress is made toward resolving the Sino-US trade war, which has dented the outlook for global growth. China is Australia's No. 1 trading partner so a downturn in the Asian giant is likely to hurt the latter's exports and terms of trade.
"The China slowdown is not new news," Craig James, chief economist for CommSec said in a note. "The key question is what lies ahead," he added. "It is a case of 'watch this space' for signs of how China's stimulus efforts are supporting economic growth."
Analysts were watching for New Zealand's inflation data due Wednesday which looks to have cooled at the end of last year, adding to growing speculation the central bank may be forced to cut interest rates later in 2019. "The CPI release will be important for the kiwi this week," said Rodrigo Catril, senior forex strategist for National Australia Bank. "NZ CPI also tends to be regarded as a good guide for Australia's CPI, due for release the following week," Catril added.
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