Australian Dollar eyes 0.70 as China GDP surprise powers rally
The Australian Dollar registers two days of consecutive gains versus the US Dollar, trading at 0.6980, up more than 0.50% as risk appetite improved, while the Aussie was supported by strong data on China’s GDP and Retail Sales.
The Australian Dollar surged to its highest level in two days, trading at 0.6980 against the US Dollar, as risk appetite improved following strong economic data from China. China reported a solid 4.5% year-over-year GDP growth in the third quarter of 2026, surpassing expectations. Retail sales also exceeded forecasts, rising by 1% year-over-year in September.
In the Middle East, ongoing attacks by the Houthis on Saudi Arabia added to the geopolitical concerns. The US Dollar Index (DXY) edged higher, up 0.19% to 101.97, with the Trump administration acknowledging inflation pressures for the first time. The Australian Dollar's technical outlook remains bearish near-term, but the pair could break above resistance at the SMA cluster around 0.7079 for a potential bounce.
China's economic health and Iron Ore prices are key drivers for the Australian Dollar, as the country is a major exporter to China. Interest rates set by the Reserve Bank of Australia also significantly impact the AUD, with higher rates generally supporting the currency. Market sentiment, both risk-on and risk-off, plays a role in the AUD's performance, with a risk-on environment typically positive for the currency.
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