Australian Dollar to US Dollar (AUD/USD) Exchange Rate Dives after Chinese Stocks Plunge

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AUD/USD Conversion Rate Predicted to Hold Losses on Damp Market Sentiment

The Australian Dollar to US Dollar (AUD/USD) exchange rate dived by around -0.9% during Thursday’s European session.

Market sentiment dampened considerably following news that the Shanghai Composite Index dived by over 7.0% at the close of Thursday’s Asian session. The turmoil in China’s equity markets also caused oil prices to crash to a fresh 12-year low which also weighed heavily on trader risk-appetite. As a commodity-correlated, high-yielding asset, the Australian Dollar dived versus its major peers. Adding to the ‘Aussie’ (AUD) depreciation was less-than-ideal domestic data. November’s Building Approvals unexpectedly slumped by -8.4% on the year despite the median market forecast 3.9% growth. A narrower-than-expected Trade Balance in November had minimal impact with market sentiment dominating trade.

In response to the less-than-ideal building approvals data, J.P. Morgan economist Tom Kennedy stated; ‘While we had expected the number of high-density approvals to move lower into year-end on the back of tighter bank lending standards and deceleration in dwelling price growth, the magnitude of today’s fall was significantly larger than we, or the market, had projected.’

The Australian Dollar to US Dollar (AUD/USD) exchange rate was trending in the region of 0.7017 during Thursday’s European session.

USD/AUD Conversion Rate Predicted to Hold Gains despite Weaker-than-Anticipated US Labour Market Data

Given that trader risk-aversion strategies has seen heightened demand for safe-haven assets, the US Dollar advanced versus many of its peers during Thursday’s European session. This is despite less-than-ideal domestic data which showed Continuing Claims failed to meet with expectations in the week ending December 26th, and Initial Jobless Claims missed estimates in the week ending January 2nd.

In response to the disappointing labour market figures, Jeffry Bartash, reporting for MarketWatch, stated; ‘An unusually high number of Americans these days have been out of work for six months or longer, and many part-timers still can’t find a full-time job despite a rapid increase in hiring over the past several years. Low claims might also be a sign of a less-hospitable labour market that offers fewer opportunities to workers now than it did in the past.’

The Australian Dollar to US Dollar (AUD/USD) exchange rate dropped to a low of 0.6977 during Thursday’s European session.

Australian Dollar to US Dollar (AUD/USD) Exchange Rate Forecast: Australian Construction Data to Provoke Volatility

During the Australasian session the Australian Dollar to US Dollar (AUD/USD) exchange rate is likely to see volatility in response to December’s Australian Performance of Construction Index. Additional volatility is likely with the publication of Australian Retail Sales for November and Foreign Reserves in December. For those invested in the US Dollar, Friday’s North American session will likely see ‘Greenback’ (USD) movement following the publication of December’s Change in Non-Farm Payrolls and Unemployment Rate.

The Australian Dollar to US Dollar (AUD/USD) exchange rate reached a high of 0.7086 during Thursday’s European session.

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