The Australian Dollar to US Dollar (AUD/USD) exchange rate remained trending in a narrow range during Monday’s trading after a disappointing start to the week for the ‘Aussie’.
Over the weekend Chinese imports were shown to have taken a rather dramatic tumble in January, dropping from -2.4% to -19.9% on the year. As Australia’s largest trading partner, any developments in the Chinese economy can severely impact the Australian Dollar exchange rate.
Currency strategist Todd Elmer commented: ‘It’s pretty clear that the weakness in Chinese imports is serving as a drag on sentiment for Australia. This will be taken as an indication of softer domestic demand in China, which threatens fallout in Australia via the commodities channel. Given how large the miss that we saw with those imports versus expectations, that will help to pressure the ‘Aussie’ going forward.’
Last Tuesday saw the Reserve Bank of Australia (RBA) announce that it planned to cut the benchmark interest rate by 25 basis points—a factor that floored the ‘Aussie’. The Australian Dollar to US Dollar (AUD/USD) exchange rate hit multi-year lows at 76.3 US cents.
This week there’s a significant lack of highly influential Australian domestic data, apart from Thursday’s Employment Change and Unemployment Rate ecostats. In addition, the reliability of labour market stats is still being brought into question.
Elmer continued: ‘There’s still a lot of uncertainty around the markets about that. I think it would take a major shock for the Australian Dollar to trade on domestic data flow rather than what’s happening abroad.’
Meanwhile, the US Dollar could also experience significant movement on Thursday with the release of US Advance Retail Sales. December is expected to show -0.5% contraction after November’s -0.9% slip. Any unfavourable figure could give the Australian Dollar to US Dollar (AUD/USD) exchange rate the opportunity to advance.
Friday will continue to be influential for the USD/AUD exchange rate with the release of University of Michigan Confidence. The index is expected to climb from 98.1 to 98.2 in February.
The Australian Dollar to US Dollar (AUD/USD) exchange rate is trending in the region of 0.7817. The US Dollar to Australian Dollar (USD/AUD) exchange rate resides at 1.2796.
Disclaimer: Currency-Converter.com.au and its data provider, TorFX, make no claims regarding the validity or exactness of the information provided in on this site and will not be held liable for any use, interpretation, or other implementation of the information provided. Currency-converter.com.au make no warranties, express or implied, as to results to be obtained from use of such information, and make no express or implied warranties of condition, quality, performance, merchantability or fitness for a particular purpose or use. Currency-converter.com.au shall not have any liability for the accuracy of the information contained in the services provided or ommissions there in which are made available on a free, as-is basis. None of the aforementioned parties shall be liable for any third party claims or losses of any nature, including, but not limited to, lost profits, punitive, consequential, special, incidental, indirect or similar damages even if advised of the possibility of such damages. Rates offered are interbank rates and may not be the same as offered by your financial institution, and do not include commissions. Rates shown on this site will vary from those provided by TorFX or other providers linked to from this site.