* China data send Canadian, Aussie dollars lower
* Euro holding most of last week's gains vs dollar
* Ukraine tensions weighing
By Patrick Graham
LONDON, March 10 The Australian and Canadian
dollars lost as much as half a percent against their U.S.
counterpart on Monday as a plunge in exports from China
underlined the risks of more weakness in one of the big drivers
of world growth.
The Aussie had been on the way back up towards the end of
last week, boosted by signs of improvement in its own economy.
But like fellow commodity producer Canada, it depends on China
extending a decade of robust expansion.
More and more doubts are emerging on that front.
Latest numbers showed Chinese exports fell 18 percent
year-on-year in February, and authorities in Beijing continued a
campaign to halt any further appreciation of the yuan by setting
its daily guidance for the currency at the highest since
Added to geopolitical risks like a crisis in
Ukrainian-Russian relations that looks set to drag on, that left
markets in "risk-off" mode, benefitting traditional safe haven
currencies like the yen and Swiss franc.
"The Chinese export numbers are the main driver this morning
- you can see that the Aussie and Canadian dollars are both
under pressure," said Alvin Tann, strategist with French bank
Societe Generale in London.
"The situation in Ukraine is back on people's minds and one
could already see the pressure on emerging markets on Friday
after (strong) U.S. non-farm payrolls."
The Aussie traded 0.4 percent lower in early European
trade at $0.9033 and 93.26 yen, having dipped as low
For the big three currencies, that left the yen up around
0.2 percent against both the euro and dollar. The
latter pair were stuck close to levels seen at the end of U.S.
trading on Friday.
The lack of action - or any sign it is imminent - from the
European Central Bank to ease policy further and boost growth
drove the euro to a 2 1/2-year high on Friday, only minimally
offset by a boost for the dollar from the U.S. jobs data.
The euro inched up about 0.1 percent against the dollar to
$1.3886, having peaked at $1.3915 on Friday.
Japan posted a record current account deficit in January on
Monday, and its fourth-quarter growth was revised down.
Still, the Bank of Japan is expected to keep policy
unchanged at a two-day meeting that began on Monday. Consumer
prices remain on track to meet the central bank's 2 percent
Analysts cautioned against reading too much into the China
trade figures, which may have been distorted by the Lunar New
Year holiday, but investors were taking no chances.
The Aussie's robust showing in the past month surprised many
who expected it to weaken on the back of poor Chinese numbers.
Citigroup analysts argued in a morning note that the Australian
economy and currency may be driven more by domestic developments
"While there is little doubt that a sustained downtrend in
Chinese imports would be negative for AUD, there looks to be
some cause for caution in overreacting to this weekend's data,"
"The relationship between AUD and Chinese economic data flow
has deteriorated in recent months, with AUD failing to
participate in the stabilization seen in data flow over the
second half of 2013."