AUDUSD drops 0.4% as weak China data dampens risk sentiment

AUDUSD declined 0.4% to 0.6420 during Asian trading following disappointing Chinese economic data that heightened concerns about Australia's largest trading partner. China's industrial production grew only 3.8% year-over-year in August, missing the 4.5% forecast, while retail sales increased 2.1% versus expectations of 2.5%. The weak data pressured commodity currencies, with AUDUSD breaking below the key 0.6450 support level. NZDUSD also fell 0.3% to 0.5880, reflecting broader risk-off sentiment in Asian markets. The disappointing figures raise questions about China's economic recovery trajectory and potential stimulus measures. Technical analysis shows AUDUSD approaching the 0.6400 psychological support, with momentum indicators turning bearish. Further downside toward 0.6380 appears likely if China's growth concerns persist, while any recovery faces resistance at 0.6450. Traders are monitoring US-China trade discussions for potential market impact.