The appeal of the ‘Aussie’ has been supportively high of late, with recent news out of China bolstering the value of the Australian currency.
The US Dollar has been a less stable option on the whole, with the latest Fed speeches doing little to reassure investors craving certainty in the wake of the EU Referendum decision.
The appeal of the Australian Dollar has been strong and steady of late, with recent Chinese ecostats solidifying the position of the ‘Aussie’ against its rivals.
In particular, yesterday’s Chinese industrial production and GDP stats for June and the second quarter came out positively, with recorded increases either matching or exceeding expectations. This went some way to counter Wednesday’s less-than-inspiring Chinese stats.
The retail sales printing for June also rose beneficially, from 10% to 10.6% on the year and from 10.2% to 10.3% on the year-to-date.
Further support has been domestic in nature, with the Tourism Research Australia (TRA) forecast for 2016 identifying that Australia is well-placed to soak up tourist-sourced spending from China, India, Indonesia and Malaysia over the year.
Opinions of the US Dollar have been less concrete compared to the Australian Dollar lately, with losses for the ‘Buck’ being found in relatively high numbers alongside gains.
Earlier on in the week, Fed official Esther George warned that low interest rates would likely harm the US economy, though more recently fellow Fed member Dennis Lockhart has recommended that the central bank be ‘cautious and patient’ with near-term rate hikes.
In what may be construed as a hawkish statement, given the current headwinds facing global markets, Lockhart stated:
‘I still can imagine circumstances in which at least one policy move could take place and possibly two. Of course it will depend on the economy’.
In the week to come, Australia and the US are both expected to release impactful ecostats, though there will be a large gap between such announcements.
From Australia, Tuesday will bring the July Reserve Bank of Australia (RBA) meeting minutes, which could give some clue as to if and when the central bank could next take an active decision on the official cash rate.
The US’s big contribution is due on Friday, when the June existing home sales results will be released.
The Australian Dollar to US Dollar (AUD/USD) exchange rate has been trending in the region of 0.7647 and the US Dollar to Australian Dollar (USD/AUD) exchange rate has been trending in the region of 1.3078 recently.
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