Economic growth in China slowed in the final quarter of 2015 to 6.8% year-on-year, in line with estimates. The figure was the lowest growth since the financial crisis in 2009, while annual growth for the whole of 2015 eased to the slowest since 1990 at 6.9%.
In other data release today, industrial production in December came in slightly below expectations at 5.9% and retail sales also disappointed at 11.1% versus estimates of 11.3%. Fixed-asset investment in urban areas also continued to cool, slowing to 10.0% year-on-year in December from 10.2% the previous month.
Asian markets reacted positively to the news that the GDP numbers were not weaker than expected. It also raised expectations that Chinese authorities would follow up with more stimulus measures to boost the economy. The main share indices across Japan, China and Hong Kong moved higher, with the Shanghai SE Composite index closing up 3.2% in late Asian session.
The yen came under pressure as risk sentiment made a return soon after the data. The US dollar came close to breaking the 118 level against the Japanese currency and was up at 117.92 yen in late Asian trading. The Australian and New Zealand dollars reversed losses from immediately after the data to head higher as market sentiment improved and commodity prices rebounded. The aussie was up at 0.6913 against the greenback and the kiwi was up at 0.6465 ahead of the latest dairy auction later today.
Crude oil prices were also firmer with US crude futures climbing 1% to $29.70 and Brent crude up 2.6% at $29.29 a barrel. Another winner on Tuesday was copper, which surged by 2.7% to $1.9965 per pound.
The euro dipped slightly to 1.0866 dollars in late Asian session as the dollar regained ground. But the pound managed to recover from fresh 5½-year lows of 1.4236 dollars yesterday to rise to 1.4285 dollars today.
Coming up later today, UK inflation data will be closely watched along with the German ZEW economic sentiment survey.
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