As expected, the Australian dollar slid, albeit marginally, on Friday afternoon in reaction to China's dismal second quarter 2012 gross domestic product (GDP) growth performance.

The local unit, as of 2 p.m. AEST, was at $US1.0168 from $US1.0182 late Thursday and at ¥80.60 from ¥80.92.

China's GDP, based on official data released Friday, slowed down to the lowest rate in three years in this second quarter due to a continued softening global demand.

China's second quarter GDP hit 7.6 per cent, down from 8.1 per cent in the first quarter.

Investors and analysts feared a slowing Chinese economy could result to a possible deceleration of Australian exports of raw materials to the second-largest economy.

"The latest Chinese economic data are encouraging for Australian businesses. China has successfully slowed its economy to a more sustainable growth rate. Now the challenge is to lift momentum, but not so far as to reignite inflation," economist Savanth Sebastian was quoted by The Australian in a note to clients.