* Euro dips, vulnerable to Spanish bond pressure
* Expected to hold within $1.30-$1.35 range
* Aussie falls as China growth disappoints
By Nia Williams
LONDON, April 13 The euro dipped along with the
Australian dollar on Friday after disappointing Chinese GDP
data, and the single currency remained vulnerable to euro zone
debt concerns but was not expected to break out of its recent
trading range against the dollar.
The Aussie, strongly influenced by China data due to
commodity-driven Australia's reliance on Chinese demand, came
under pressure after data showed China's economy grew 8.1
percent in the first quarter of 2012, below forecasts of 8.3
Some market players said the Aussie's fall may be temporary,
with speculation of another round of quantitative easing (QE)
from the U.S. Federal Reserve likely to support riskier assets.
Analysts said with little data scheduled, trading was likely
to be subdued during the European session. The euro was
vulnerable, however, to any sudden blowouts in Spanish bond
yields, which have climbed in recent weeks on concerns about
Spain's fiscal position.
The common currency was last down 0.2 percent on the
day versus the dollar at $1.3156. It was seen as unlikely to
break out of the lower end of the $1.30-$1.35 range it has
traded in since January.
"Markets are illiquid so we have a risk yields move or there
is stop-loss hunting and we see a strong move in one direction
or another," said Antje Praefcke, currency strategist at
"But we would need a clear-cut statement of QE3 or anything
new on the debt crisis to break out of this range."
Traders reported automated stop loss euro buy orders above
resistance at Thursday's high and the 21-day moving average
around $1.3212. With trading volumes still thin in the aftermath
of the Easter break, the euro could break higher if those stops
Worries about euro zone debt problems receded slightly on
Thursday after Italy cleared its latest round of bond auctions,
but Spanish 10-year yields continued to trade just below 6
The Australian dollar fell 0.4 percent to US$1.0391
, near a session low of US$1.0381 after the GDP data
from China, Australia's biggest export market. The move pared
gains of 1.2 percent on Thursday which were driven by
surprisingly strong local jobs report and solid loan numbers
Market players reported stop-loss orders building above
US$1.0465, Thursday's high.
The chances of the euro and the Aussie clearing major
resistance remained in place, some analysts said, as other
Chinese data on Friday such as March retail sales and industrial
output came in above expectations.
"While there was a knee-jerk market reaction to
softer-than-expected GDP, figures for March were not that bad,
which suggests some stabilisation after weakness in earlier
months," said Bank of Tokyo-Mitsubishi UFJ analyst Teppei Ino.
Major currencies showed no reaction to news that North
Korea's much hyped long-range rocket crashed into the sea
shortly after launch on Friday.
The dollar was steady versus the yen at 80.90,
extending gains from Wednesday's six-week low of 80.57 yen.
Market players were also looking ahead to U.S. CPI inflation
data due at 1230 GMT. Analysts said any sign of stronger
inflation could limit the Fed's scope to ease policy
However, the Dec 2013 fed funds future has fully abandoned
the possibility of a 0.25 point hike at the end of 2013,
underlining the recent shift in expectations back toward
additional Fed easing.