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EUR/USD Update – China Can Endure Growth Slowdown to 6.5%, Finance Chief Says



Good day forex traders and readers.

As we head into the last trading day of the week, the EUR/USD remains light in trading having spiked bullish a day ago. It is currently above 1.3 and is likely to hold so unless unexpected events occur. We do have PPI data for the US and also preliminary UoM consumer sentiments in the early US trading session. Monitor those closely.

In the meanwhile, China is sort of disappointing these days as the global markets look towards it for growth to bring the rest along. This will like affect the AUD/USD too. Find below the report from Bloomberg :

Chinese Finance Minister Lou Jiwei signaled the world’s second-biggest economy may expand less than the government’s target this year and that growth as low as 6.5 percent may be tolerable in the future.

While the government in March set a 2013 growth goal of 7.5 percent, Lou said he’s confident in achieving a 7 percent rate this year. He spoke yesterday at the U.S.-China Strategic and Economic Dialogue in Washington. The nation’s broadest measure of credit fell to a 14-month low in June during an interbank cash squeeze, central bank data showed today.

His comments suggest China is prepared to allow a further slowdown from a rate that’s already at risk of falling to a 23-year low this year as Premier Li Keqiang focuses on policy changes to create more-sustainable expansion. Li said this week that the government should keep restructuring the economy as long as growth, employment and inflation stay within limits he didn’t specify.

“We don’t think 6.5 percent or 7 percent will be a big problem,” Lou said at a press briefing in response to a question on whether there’s a limit on slower growth that officials will tolerate. “It’s difficult to give you a limit. But from the data we have, we have the confidence.”

He said, “please don’t forget that our expected GDP growth rate this year is 7 percent.” Lou said “there won’t be much of a problem to meet our expectations this year.” Growth Targets

Lou’s remarks may add to confusion over the government’s growth targets and tolerance levels. Li said in May that the nation seeks 7 percent annual expansion this decade. He said at a March 17 press conference, his first after becoming premier, that China must average 7.5 percent growth through 2020. State-media transcripts of the briefing that […]

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