The Australian Dollar to US Dollar (AUD/USD) exchange rate advanced by around 0.7% during Tuesday’s European session.
Despite the fact that Australian economic data produced poor results during Tuesday’s Australasian session, the ‘Aussie’ (AUD) gained versus many of its currency peers and continued to appreciate during the European session. This was mainly the result of significantly improving market sentiment after the Shanghai Composite Index ended the Asian session 0.5% higher; signalling stability in China’s equity markets.
In addition to improvements in the Far East, market sentiment improved amid mounting speculation that the Federal Reserve will look to delay a benchmark interest rate hike until 2016. A succession of disappointing US economic data publications has had a significantly detrimental impact on demand for the Dollar. The longer a delay to a Fed rate hike, the better for Australia.
The Australian Dollar to US Dollar exchange rate was trending in the region of 0.7128 during Tuesday’s European session.
With an absence of further economic data to provoke changes for the US asset, the AUD/USD exchange rate is likely to hold gains for the remainder of Tuesday’s European session. As we enter the Australasian session, however, the AUD/USD pairing could see fluctuations in response to a speech by policymaker John Williams. John Williams supported reassurances from Fed Chairwoman Janet Yellen last week that the Fed is likely to tighten monetary policy in 2015. However, this was prior to the recent run of disappointing ecostats which has caused many to delay expectations of a near-term rate increase.
The Australian Dollar to US Dollar (AUD/USD) exchange rate dropped to a low of 0.7066 during Tuesday’s European session.
Given the absence of further US and Australian economic data, the AUD/USD exchange rate is likely to hold gains for the remainder of Tuesday’s European session. However, there is the potential for AUD/USD fluctuations with the William’s speech and Australian AiG Performance of Construction Index due for publication. As always, market sentiment will play a strong hand in the Australian Dollar to US Dollar (AUD/USD) exchange rate.
The Australian Dollar to US Dollar (AUD/USD) exchange rate climbed to a high of 0.7138 during Tuesday’s European session.
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