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 Australian dollar rose against other most-traded currencies today. With domestic macroeconomic data being a mixed bag, it is likely that the currency found outside support for its rally. Market analysts speculated that the Aussie gained on optimism about the US-China trade talks, though it is important to note that today’s headlines provided conflicting reports about the progress in the negotiations.
It looked like all fundamentals were negative for the Australian dollar today. That included the disappointing growth of private sector credit, the dovish monetary policy outlook, and the market sentiment that was unfavorable for riskier currencies. Yet surprisingly, the Aussie did not perform that bad considering all the negative factors. While it fell against some major rivals, the currency managed to gain on others.
The Mexican peso is mixed against a basket of currencies to end the trading week. Investors are combing through the nation’s latest industrial production numbers for July, while also monitoring monetary policy. With inflation lower than what central banking officials want and the economy enduring immense uncertainty, analysts are unsure how the government will tackle the situation.
The Chinese yuan is strengthening against major currency rivals on Thursday, which may surprise investors because of what has been transpiring toward the end of the trading week. In addition to disappointing economic data, there were reports that the White House was considering an interim US-China trade agreement, something that was quickly disputed within hours.
The Australian dollar rallied today, rising for the eighth session versus the Japanese yen, after signs that the US-China relations are improving. That spurred hopes that the trade conflict between the two world’s biggest economies can end in the foreseeable future. And optimism increased demand for riskier high-beta assets.
The Australian dollar rose today, though gains were limited. Macroeconomic data in Australia itself as well as in China, its biggest trading partner, was mixed, giving the currency no edge.
The Chinese yuan is weakening to kick off the trading week, driven by a decline in August exports as the world’s second-largest economy continues its trade dispute with the US. But investors were optimistic about Beijing’s $126 billion cash injection into the struggling market, especially with analysts anticipating greater stimulus for the remainder of 2019.
The Japanese yen is weakening midweek as new economic data is exacerbating recession fears. With some central bankers suggesting pre-emptive stimulus to prevent a contraction, investors are paying attention and think the world’s third-largest economy is heading for a steep contraction, even with a new trade agreement with the US later this month
The South Korean won declined against the US dollar today after South Korea’s inflation fell to the lowest level on record.
