FOREX-Australian dollar strengthens on encouraging Chinese data

* Australian dollar rises 0.2% after Chinese Q2, June data
* Chinese retail sales, output beats expectations
* Chinese quarterly GDP growth hits slowest since 1992
* Yen, Swiss franc ease after data release

By Tom Westbrook
SYDNEY, July 15 (Reuters) - The Australian dollar
strengthened on stronger-than-expected economic data from China,
which some analysts saw as signalling that moves aimed at
reviving spending in the world's second biggest economy are
having some success.
The Aussie AUD= gained against the U.S. dollar USD= ,
which advanced against the safe-haven yen JPY= and the Swiss
franc CHF= .
China's industrial output bounced in June from a 17-year low
in the previous month. June retail sales surged 9.8% from a year
earlier, compared with the 8.3% - a slowing from May's tepid
figures - that polled analysts expected. The Australian dollar rose almost 0.2% to $0.7024 after
China's data release. The yuan CNY= strengthened against the
dollar to touch its highest since last week.
"China's economy is finding a base and it was not as weak as
feared, so risky currencies go up," said Imre Speizer head of NZ
strategy at Westpac Banking Corporation WBC.AX in Auckland.
"The market is wanting to price a lot of risk into the
Aussie," he said.
China's quarterly gross domestic product posted its slowest
pace of growth in 27 years, as expected, growing by 6.2% in the
June quarter compared to a year earlier. Ray Attrill, head of forex strategy at National Australia
Bank in Sydney, said Monday's figures, on the back of credit
data on Friday, showed China's stimulus program is gaining
traction.
"There are signs it is starting to work," he said.
"Whether you're building a railway between two cities in
China or whether you're building stuff to sell to the U.S. it
seems to need a lot of steel... it is still a good news story
for Australia - that's certainly the way that the market has
chosen to interpret the numbers."
The data also lifted the China-exposed New Zealand dollar
NZD= by 0.18% to $0.6721.
The U.S. dollar, meanwhile, remains under pressure on
expectations of a Federal Reserve rate cut. Comments last week
from Fed Chair Jerome Powell and Chicago Fed president Charles
Evans indicated U.S. rate cuts are needed to boost inflation.
In the U.S., a 25 basis-point rate cut in July is priced
in, along with an almost 20% chance of a 50 basis point cut.
Investors will be looking to U.S. retail sales figures due
Tuesday and company earnings for signs of how shoppers and
businesses are weathering the slowdown.
Against a basket of currencies .DXY the dollar held near a
10-day low at 96.865.
It gained against the yen to break 108.00, though still
remains underneath resistance at 108.98. Monday is a national
holiday in Japan and dollar-yen trading volumes were thin.
The greenback rose 0.1% to $0.9853 against the Swiss franc.
The euro EUR= slipped back to $1.265 though remains stuck in a
two-cent range that has held the single currency since June.