The Australian dollar took a brief dip on Wednesday as China's industrial output data came in just below expectations, but a steady reading on overall economic growth was taken as a positive for commodity demand and prices. The Australian dollar had notched five straight sessions of gains, and it quickly recovered from the slip, steadying to around $0.7667, just below a two-week high of $0.7690 struck on Tuesday.
"The Aussie has been trading well within 76-77 US cents. In the short term, today's data does not raise any concerns," said Craig James, chief economist at CommSec. "I think once people digest the numbers fully we'll see that China's economy is transitioning well from an emerging country to an advanced country. There is some degree of cheer for Australia there."
China is Australia's single largest export market and a key driver of resource prices. The New Zealand dollar rose 0.4 percent for its fourth straight day of gains following higher-than-expected inflation data on Tuesday and improving global dairy prices. While economists still expect New Zealand rates to be cut by 25 basis points next month, the market had pared back chances of further easing after a run of upbeat economic news.
New Zealand government bonds gained, sending yields as much as 2 basis points lower. Australian government bond futures also firmed, with the three-year bond contract up 1 basis points at 98.290 while the 10-year contract rose 2.5 ticks to 97.7150. The Asian giant's economy grew 6.7 percent in the third quarter from a year earlier, matching forecasts and a relief to investors who had feared a harder landing earlier in the year.
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