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Asian trade-related currencies strengthen after China data

10/19/2020 | 03:43am EST

* The Chinese yuan parked near 1-1/2-year high versus dollar

* Nordic currencies inch higher too, led by Nokkie

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

LONDON, Oct 19 (Reuters) - Asia's trade-exposed currencies held firm on Monday as data showed China's economic rebound from the pandemic accelerated in the third quarter, with the yuan staying close to its recent 1-1/2-year high.

China's gross domestic product grew 4.9% in July-September from a year earlier, slower than analysts' forecast but faster than the second quarter and helped by strong gains in industrial output and an acceleration in retail sales.

The yuan and the Australian and New Zealand dollars slipped from session highs after the Chinese GDP headline miss, but then rebounded on the view that consumption data from China was a harbinger of better growth in the current quarter.

The Chinese currency was last flat at 6.6935 against the U.S. dollar in the offshore market, close to 6.6785 which it reached on Oct. 9, its strongest since April 2019.

The yuan benefited in the last few months from hopes of a Joe Biden win in the U.S. presidential election, as he is seen as less of a threat to U.S.-China relations.

The Australian dollar was 0.3% higher at $0.7098 and the New Zealand dollar rose 0.4% to $0.6627.

"The renminbi, other Asian and commodity-related currencies should continue to benefit," said Lee Hardman, currency analyst at MUFG, noting that the spread of COVID-19 in Asia remains more contained than in the rest of the world and that points to "a continuation of cyclical outperformance" there.

The dollar was broadly stable elsewhere, supported by investor worries about rising coronavirus cases, the looming U.S. election and fading prospects of any fiscal stimulus before the election.

An index tracking the greenback against a basket of currencies was last steady at 93.68, close to the top of the last three months' trading range.

"The dollar can remain elevated this week," said Commonwealth Bank of Australia analyst Kim Mundy. "A lack of fiscal stimulus and rising coronavirus infections raise concerns about the global economic outlook."

Euro/dollar was also neutral at $1.1714.

Faint hopes that Democrats and the White House could agree on a new spending programme was tempered by the opposition of Senate Republicans and as investors focused on what the election outcome means for stimulus later.

Fifteen days out from election day, Biden leads Trump by about 10 points in national polls, and has a narrow lead in several battleground states. The pair are due to face off in a final debate on Thursday.

Elsewhere, the Nordic currencies strengthened, with the Norwegian crown leading the way. The crown was up 0.5% versus the U.S. dollar at 9.3430 and by the same amount versus the euro at 10.9395.

The British pound also rose by 0.4% versus the euro to 90.38 pence, on hopes the deadlock in Brexit talks can be broken. Versus the dollar, sterling rose 0.3% at $1.2955.

(Reporting by Olga Cotaga; Additional reporting by Tom Westbrook in Singapore Editing by Susan Fenton)

© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / CANADIAN DOLLAR (AUD/CAD) 0.03% 0.95762 Delayed Quote.4.77%
AUSTRALIAN DOLLAR / JAPANESE YEN (AUD/JPY) -0.10% 76.88 Delayed Quote.0.00%
AUSTRALIAN DOLLAR / NEW ZEALAND DOLLAR (AUD/NZD) -0.40% 1.05128 Delayed Quote.0.89%
AUSTRALIAN DOLLAR / SWISS FRANC (AUD/CHF) -0.33% 0.66875 Delayed Quote.-1.83%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) -0.02% 0.7363 Delayed Quote.3.98%
BRITISH POUND / AUSTRALIAN DOLLAR (GBP/AUD) 0.18% 1.81711 Delayed Quote.-3.36%
EURO / AUSTRALIAN DOLLAR (EUR/AUD) 0.19% 1.6181 Delayed Quote.1.61%
EURO / BRITISH POUND (EUR/GBP) -0.01% 0.8905 Delayed Quote.5.09%
UNITED STATES DOLLAR (B) / CHINESE YUAN IN HONG KONG (USD/CNH) -0.19% 6.5636 Delayed Quote.-5.45%
US DOLLAR / CHINESE YUAN RENMINBI (USD/CNY) -0.20% 6.5765 Delayed Quote.-5.41%
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