The Australian Dollar to US Dollar (AUD/USD) exchange rate shed 0.3% prior to the publication of the Reserve Bank of Australia’s policy meeting minutes.
Although the ‘Aussie’ was initially buoyed by the news of a free-trade agreement being reached between Australia and China (the South Pacific nation’s largest trading partner) the Australian Dollar went on to decline against almost all of its currency counterparts.
China’s President Xi Jinping recently stated; ‘The Chinese government is ready to enhance dialogue and cooperation with relevant countries to jointly maintain freedom of navigation and the safety of maritime rules and ensure a maritime order of peace, tranquillity and win-win cooperation. At the same time, the Chinese people will firmly uphold the core interests of China’s sovereignty, security and territorial integrity.’
Australian Dollar demand was compromised by a less-than-spectacular domestic New Motor Vehicle Sales report.
New Motor Vehicle Sales showed a -1.6% month-on-month decline and a -0.5% year-on-year slump.
The AUD/USD exchange rate fell to a low of 0.8719 on Monday.
However, the Australian Dollar was able to surge to a seven-year high against the Yen as investors adjusted to the news that Japan had unexpectedly fallen into recession.
Japan indicated that it is putting together a stimulus programme to shore up the nation’s economy after it fell into its forth recession since the onset of the global economic crisis.
According to economist Glenn Levine; ‘The Japanese economy is in recession and has now contracted in three of the last four quarters. The most likely course is now a snap election in December in which voters choose, naturally enough, to delay the tax increase.’
The Australian Dollar to Japanese Yen exchange rate jumped to a high of 102.4000.
The AUD/USD exchange rate continued trending lower even as US Industrial Production data fell short of forecasts by registering a -0.1 decline instead of the 0.2% gain anticipated.
Overnight the Australian Dollar to US Dollar (AUD/USD) exchange rate could experience volatility as a result of Australia’s Conference Board leading index and the publication of the Reserve Bank of Australia’s meeting minutes.
Economists will also be looking ahead to Wednesday and the release of the Federal Open Market Committee meeting minutes.
The Australian Dollar to US Dollar (AUD/USD) exchange rate was trending in the region of 0.8717.
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