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Chinese data in worsening trade war

Published August 8, 2018

Author: Dennis Li

The AUD maintained yesterday’s gains against the USD keeping above 0.7400 for the duration of offshore trading. It has also held up nicely across all the majors holding on to gains against the GBP and NZD particularly and regaining ground against the EUR after a little pull back overnight. Generally a quiet night from a data perspective but today’s Chinese trade balance and tomorrow’s Chinese CPI are the next data releases that will potentially influence the AUD’s direction.

  • The Chinese yuan showed more stability overnight, strengthening to 6.8280 after China’s central bank raised the cost of shorting the currency which helped to stem an approximately 7% decline since mid-June.
  • The German economy, the biggest in Europe, is set for modest growth in the Q2 after industrial output edged higher and job vacancies surged by 25,000. The Euro rose modestly against the USD touching 1.1600 while the AUDEUR saw little net change at just below 0.6400 despite a volatile 24 hours.
  • With the US sanctions on Iranian goods went into effect yesterday, Oil rose overnight touching its high at $69.83 per barrel, intensifying concerns that sanctions on Iranian oil, expected in November, could result in supply shortages.