Author: Dennis Li
The Australian dollar dropped by almost 100 points after breaking through its 0.74 significant level against the greenback in the last 24 hrs. The AUD spiked up with the support of robust employment data yesterday which however bounced back under the pressure from further depreciation of China’s yuan amid the fear of global trade war.
The USD halted its winning streak after US President Donald Trump expressed concern about a strong currency. He also criticized the Fed’s rate-hike monetary tightening policy, which broke White House tradition of avoiding comments on monetary policy.
Despite Trump’s comment, the Chinese yuan continue its tumble further to its one-year low 6.7832 overnight. And Chinese policymakers are pumping more liquidity into the Financial system looking to further loosen monetary conditions to mitigate threats to growth from an intensifying Sino-US trade war. AUDCNY also fell back to around 4.960 after testing the psychologically significant level of 5.00.
The sterling slid further testing its support level of 1.3 against the USD after the surprisingly weak retail sales data last night. Meanwhile the sales for Q2 as a whole were 2.1 percent higher than Q1 which gave the BoE some reassurance that a sluggish start to 2018 is over. AUDGBP remained little change.
Oil edged up back to $70 per barrel mark with investors waiting Canada Inflation and retail sales data later on tonight in Australian time zone.
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