China’s first-quarter GDP figures are expected to show a contraction of 6%. Better figures may boost markets and weigh on the dollar while weaker statistics could trigger a sell-off and gains for the greenback, FXStreet’s analyst Yohay Elam reports.
Key quotes
“Economists foresee an outright contraction of 6% in the first quarter of 2020, mirroring the growth rate of 6% seen in the last quarter of 2019. That would be the worst in modern memory.”
“If Beijing reports slower contraction than expected, a figure closer to 0%, markets would cheer, sending shares higher and the safe-haven dollar and yen lower. The Australian dollar may be one of the biggest beneficiaries as Australia depends on China more than other developed economies. Oil prices could rise on hopes for higher demand, boosting the Canadian dollar.”
“Deeper damage to the economy, over 6% contraction, would weigh on equities, boost the safe-haven currencies and drive commodity currencies lower.”
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