The Australian dollar held steady on Tuesday, maintaining its footing near recent highs as investors welcomed stronger-than-expected economic growth figures out of China. The upbeat data helped shore up risk appetite in Asia-Pacific markets and added support to the Aussie, which is often seen as a proxy for Chinese demand.
China’s economy expanded 5.3% year-on-year in the first quarter, beating economists’ expectations and signaling momentum in the recovery. Industrial production and retail sales also came in above forecasts, suggesting domestic demand is picking up despite property sector concerns and trade tensions. The results bolstered optimism across commodity-linked currencies, with the Australian dollar among the key beneficiaries.
AUD/USD hovered near 0.5915, slightly higher on the day, as traders interpreted the data as a sign that Australia’s largest trading partner may avoid a deeper economic slowdown. Markets also responded positively to signs that Beijing may hold off on aggressive stimulus, relying instead on organic growth drivers.
“The China GDP surprise gives the Aussie a much-needed lift,” said a Singapore-based FX strategist. “There’s a sense that global growth may stabilize in Q2, and that’s good news for currencies linked to cyclical demand and commodities.”
However, gains in the Australian dollar were tempered by cautious expectations for the Reserve Bank of Australia, which remains concerned about sticky inflation but has shown little urgency in tightening policy further. With traders now pricing in potential Fed rate cuts later this year, the AUD may remain range-bound unless global risk sentiment improves meaningfully.
Attention now turns to upcoming Australian employment data and any follow-through from China’s economic momentum. If positive sentiment persists, the Aussie could test key resistance levels in the sessions ahead—but much will depend on how global markets interpret this latest macro narrative.
