Author: Dennis Li
After hitting a three day high yesterday of 0.7440 the Aussie has already seen some selling pressure this morning losing 20 points in early trade. US consumer spending released overnight showed an increase for June building a strong base for the economy heading into Q3.
The Japanese Yen fell 1.07% against the greenback as the Bank of Japan pledged to keep interest rates very low for the time being. The BoJ also took measures to make its massive stimulus program more flexible, reflecting its forecast that it would take time for inflation to reach its 2 percent target. The AUDJPY is also up by 1.29% above 83.00 overnight. As the global trade war intensifies the Japanese Economy Minister Toshimitsu Motegi said that the US and Japan will hold their first bilateral trade talks in Washington on Thursday 9th August.
Also suffering from the growing trade tensions, the EU economic growth released last night showed further slowdown in Q2 with GDP at 2.10%, 0.4% lower than the previous quarter. While its CPI is higher than expected due to higher energy prices. The Euro was touching resistance at 1.1700 against the USD, and the AUDEUR is still in the range testing its 0.6350 level.
The Chinese yuan steadied overnight at just above 6.80 against the USD with its slower growth in manufacturing sector, impacted by the worsening trade dispute with Washington, bad weather and weaker domestic demand. However, according to the state-run Xinhua news agency, China will keep its economic growth within a reasonable range and achieve this year’s target despite challenges. The AUDCNY also reached its nearly six-month high at 5.0830 overnight.
Once again the AUD will dog paddle until either the release on Friday of our Retail Sales or tonight’s US PMI.
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