Commodity currencies drop as China’s growth fails to meet market expectations

China's economy fell to an annualized 6.8% according to the National Bureau of Statistics (NBS) falling short of expectations and representing yet another which has steadily declined since last posting gains in quarter 2 of 2014. Industrial production in China also has the potential to move markets. December's number of 5.9% is still slightly disappointing just above the lows registered in 2008.

The AUD/USD pair was down 0.22% trading at $0.6850, down from the 0.20% gains at $0.6879 witnessed immediately before the release of the Chinese data. Pair made intraday low at $0.6838 levels. Same way NZ$ also fell against USD and made intraday low at $0.6415 levels.

The commodity currencies continue to feel the pressure of the slowing Chinese economy and the buck erased much of its losses on the back of the China GDP and Industrial production data.

The relatively limited domestic data calendar in Australia will likely mean the focus will be maintained on broader developments. The Westpac Consumer Confidence is released later on Tuesday before Thursday's Consumer Inflation Expectations.

In the US, the week is slightly busier with a raft of CPI data due on Wednesday before the release of Initial job claims on Thursday.