The latest Chinese and Australia trade figures are on tap too. Alarmingly weak trade flows earlier this year were one of the biggest red flags that the Chinese economy was creaking, but the ship seems to have steadied in recent months.
The outlook for Chinese trade isn’t particularly bright though – U.S. growth next year will slow significantly, perhaps to around 1-1.5%, the euro zone is flirting with recession, and slowing growth in China to less than 5% will weigh on demand for imports.
Currency traders and central bank watchers, meanwhile, will take note of the latest FX reserves figures on Thursday from Asian countries – China, Indonesia, Malaysia and Singapore – and Hong Kong.
Their total holdings currently exceed $4 trillion, of which China accounts for $3.1 trillion.
International reserves managers are conservative by nature, so changes to their investments tend to come at a glacial pace. Still, the broad trend over the last year or so has been one of central banks reducing their holdings of U.S. Treasuries, potentially another headwind for the dollar.
