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Political drama has little impact on currencies

Published August 22, 2018

Author: Dennis Li

With the markets taking the turmoil in Australian politics in its stride, the Aussie continued its winning streak gaining another 0.41% against the USD. The sell-off of the greenback continued through Tuesday after US President Trump’s criticism of the Fed for raising interest rates. The USD decline has seen a retreat on the cross rates with the AUD/EUR and AUD/GBP pulling back from recent highs.

  • Australian Prime Minister Malcolm Turnbull survived a leadership challenge by Home Affairs Minister Peter Dutton on Tuesday morning with a narrow margin.
  • From the RBA August Monetary Policy Meeting minutes released on Tuesday, the RBA was generally more upbeat about the economy whilst it is seeking to be ‘a source of stability and confidence’ by keeping rates at record lows.
  • The US and Mexican trade ministers were set to resume talks over the North American Free Trade Agreement (NAFTA) in Washington on Tuesday in a final push for a deal on autos that would open the door for Canada to return to negotiations this week.
  • Japan and China are in talks to resume a 3 trillion yen (U$27.2 billion) currency swap arrangement between their central banks representing a thaw in relations between the world’s second-and third- largest economies.
  • China’s Foreign Ministry said on Tuesday that it hopes a good outcome can be reached during trade talks this week with the US.