The Australian dollar did not change Monday’s direction on Tuesday, continuing to fall against other major currencies. The most important factors driving the currency were the dovish monetary policy outlook and mixed macroeconomic data in Australia’s biggest trading partner, China.
The Chinese yuan is struggling against its major currency competitors on Tuesday as optimism over the first phase in the US-China trade deal diminishes. After initial celebration in financial markets, investors now have some consternation until a formal and written agreement is signed. The yuan was greater impacted by disappointing economic data.
The Australian dollar started the trading week with losses against other most-traded currencies. The general market sentiment seemed to be relatively optimistic due to the positive news about the US-China trade negotiations. But trade data from China released on Monday did not look good, and that is one of the possible reasons for the weak performance of the Aussie.
The US dollar is rising at the end of the trading week, driven by investors witnessing progress in the latest principal-level US-China trade negotiations. Markets do not expect that a comprehensive trade agreement, but investors think that both sides are open to a mini-deal that would pause the trade war. This would provide markets with some relief and certainty entering into 2020.
The Swiss franc is trading slightly lower on Thursday as investors are confident that the US-China trade negotiations are progressing, a development that would diminish the franc’s safe-haven appeal. The near-term trend might please the central bank amid efforts to fight the currency’s overvaluation. But is it enough to prevent further monetary easing? Analysts suggest that it is not.
The Chinese yuan is rising ahead of several currency pairs as the world’s second-largest economy prepares to restart trade negotiations with the US. Before even beginning the talks, it is being reported that Beijing is becoming hesitant to reach a broad trade agreement. Chinese officials reportedly do not want to cave to Washington’s chief demands, meaning that the discussions might endure a premature end.
The Chinese yuan is weakening to start the trading week, despite a slight improvement in economic data. The yuan, which has been battered against most currency rivals, has slipped way beyond the 7 threshold, leaving analysts wondering if this is the point of no return between the greenback and the yuan. The only way the market will find out is next month in Washington.
The New Zealand dollar dropped today, touching the lowest level in four years versus its US counterpart. The currency was dragged down by poor domestic macroeconomic data and the general risk-off sentiment on the Forex market. A positive report about China’s manufacturing sector limited the downside momentum, though.
The US dollar is gaining on several major currencies at the end of the trading week, buoyed by strong economic data, including personal income and durable goods. In addition to the better-than-expected numbers, it was recently reported that high-level talks between US and China trade representatives will restart on October 11.
The week started seemingly bad for the Australian dollar as fundamentals looked rather unfavorable to the currency. Some of the domestic macroeconomic indicators released on Monday were bad, and there was troubling news about China-US trade negotiations. But the Aussie did not perform particularly poorly and even managed to gain on some major rivals.
