The Australian Dollar to US Dollar (AUD/USD) exchange rate has been moving in the ‘Greenback’s favour today, due to a Chinese market malady forcibly rippling outwards from the Asian superpower with a great deal of force.
The Australian Dollar (AUD) has slipped against almost all of its competitors so far today; positive movement has included a narrow trending against the Canadian Dollar (AUD/CAD) and a 0.4% gain on Pound Sterling (AUD/GBP), but the more numerous losses have been comprised of -0.3% against the Chinese Yuan (AUD/CNY) and the US Dollar (AUD/USD), as well as -0.7% against the Euro (AUD/EUR).
While the most recent Australian data has simply consisted of the February consumer inflation expectation reprinting at 3.6%, the more overwhelming source of negativity has been a crash situation coming out of China. Based on past attitudes, the prevailing opinion in Australia was that the economic shutdown imposed by Chinese New Year celebrations would bolster the ‘Aussie’ due to no bad news being released.
Following this, it was assumed that the vast Asian economy would make an orderly, stable re-entry into the markets a few days later. In both instances, investors were sorely disappointed.
The US Dollar (USD) has largely been on a positive footing today, having gained on the recent announcement that US initial Jobless and Continuing Claims reduced in early February and late January compared to previous figures.
This performance is a significant improvement on yesterday, when Fed Chair Janet Yellen’s dovish comments sent investors running for the hills.
The near future will bring a second opportunity for Yellen to speak her mind in as many days, this time in front of the Senate Banking Committee. Based on today’s market chaos, it is possible that the policymaker could further wind down her Fed interest rate hike predictions, although it is equally possible that Yellen will simply repeat her prior opinions.
Coming considerably later than this will be tomorrow’s early Australian Home Loans result for December, which was forecast to rise from 1.8% to 3% at the time of writing.
The Australian Dollar to US Dollar (AUD/USD) exchange rate was trending in the region of 0.7100 and the US Dollar to Australian Dollar (USD/AUD) exchange rate was trending in the region of 1.4090 today.
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