Over the past week, the Australian Dollar to US Dollar (AUD/USD) exchange rate was trending within the region of 0.6902 to 0.7139.
On Monday afternoon the Australian Dollar to US Dollar advanced by around 0.5% but remained close to a six-year low. The ‘Aussie’ (AUD) appreciation can be linked to positive results from domestic data. The advance has been sluggish, however, amid ongoing concerns regarding China’s economic woes and their impact on Australian exports. In addition, China cut its estimate for 2014 growth from 7.4% to 7.3%, which further emphasised the fact that Beijing is far from confident in performance of the world’s second-largest economy.
Australia’s economic data produced positive results on Monday. August’s AiG Performance of Construction Index advanced from 47.1 to 53.8. That meant that construction output broke the 50 barrier which separates growth from contraction. In addition, ANZ Job Advertisements came in at 1.0%; significantly bettering the previous figure of -0.5%. Also, August’s Foreign Reserves climbed from A$58.9 billion to A$71.2 billion.
The Australian Dollar to US Dollar (AUD/USD) exchange rate was trending in the region of 0.6942 during Monday’s European session.
With US markets closed as North America celebrates Labour Day, the ‘Greenback’ (USD) is generally trending lower versus most of its major peers. The depreciation is mostly the result of ongoing concerns regarding China’s economic struggles and the impact that might have on Federal Open Market Committee (FOMC) decisions. With China’s economic slowdown causing many commodity prices to tumble, the resultant lack of global inflationary pressures could cause the Federal Reserve to delay hiking the cash rate until the first-quarter of 2016.
Looking ahead, there will be several domestic data publications over the coming week with the potential to provoke changes for the Australian Dollar to US Dollar (AUD/USD) exchange rate. In terms of Australian economic data, the most significant publications will be Thursday’s Unemployment Rate and Employment Change. The ‘Aussie’ is also likely to see significant changes in response to results from China’s economic data publications.
In terms of US data, Friday’s University of Michigan Confidence report will be of most interest to those invested in the ‘Buck’ (USD). China’s ecostats may also have an impact on the US Dollar given that many are linking the first FOMC rate hike with improvement in China’s economic situation. Positive results from China’s data will support rate hawks looking for a near-term Fed liftoff.
The Australian Dollar to US Dollar (AUD/USD) exchange rate was trending within the range of 0.6909 to 0.6950 during Monday’s European session.