Australian Dollar to US Dollar Exchange Rate Pressured on Signs Global Growth Still Being Hit
While Australian data for much of the past month has been decent, the Australian Dollar to US Dollar (AUD/USD) exchange rate continues to tumble this week after last week’s losses. Global growth jitters and a stronger US Dollar (USD) are behind the losses.
Last week saw AUD/USD open at the interbank level of 0.69, then spend most of the week attempting to gain.
AUD/USD touched on a weekly high towards the end of the week, but the pair slipped back at the end of the week.
AUD/USD ultimately closed last week in the interbank region of 0.68, and continued to tumble lower within that region this week so far. This morning, AUD/USD touched on its lowest levels in over a month.
The Australian Dollar (AUD) could find support if upcoming Australian data beats expectations, but bushfire crisis concerns persist.
Australian Dollar (AUD) Exchange Rates Pressured by Bushfires and Chinese Virus Concerns
Investors have had little reason to buy the Australian Dollar (AUD) since the end of last week. The currency’s rivals strengthen, and the global growth outlook appears dampened.
As the US Dollar (USD) strengthens, the ‘Aussie’ sees more pressure.
Australia’s domestic outlook is also being dampened by a worse and longer than expected Australian bushfire crisis.
With fires still raging on, concerns about its potential impact on Australia’s economy are worsening.
On top of this, concerns about China’s economic performance are deepening. A virus outbreak in central China has some analysts speculating that it could seriously impact economic activity.
Overall, amid these crises as well as the International Monetary Fund’s (IMF) lowered growth forecasts, concerns of global growth persist and are keeping AUD under pressure.
US Dollar (USD) Exchange Rate Strength Softens as Safe Haven Rivals Strengthen
The US Dollar (USD) saw a surge in demand on US-China trade optimism and stronger than expected US data towards the end of last week. That rally appears to have run out of steam for now.
The US Dollar was strong yesterday, but has been unable to hold its best levels against the weak Australian Dollar (AUD) today.
Investors are hesitant to keep buying the US Dollar, as market concern about the global growth outlook is rising again.
While the US Dollar is a safe haven currency as well, China virus concerns and other risk-off factors are bolstering safer currencies like the Japanese Yen (JPY) instead.
As a result of this and lingering speculation that other US Dollar rivals like the Euro (EUR) could soon strengthen, the US Dollar lacks the drive for further gains.
Australian Dollar to US Dollar (AUD/USD) Exchange Rate Could Find Support in Australian Data
The Australian Dollar (AUD) has been lacking in drive since last week. That could change though, if upcoming Australian datasets impress investors.
Tomorrow will see the publication of Australian consumer confidence data from Westpac. If the data beats forecasts of an -0.8% contraction, the ‘Aussie’ could see a little relief.
Australia’s December job market report, due on Thursday, is likely to be even more influential.
Australian job results could influence Reserve Bank of Australia (RBA) interest rate speculation if they surprise investors. Strong data will lead to stronger AUD performance.
The US Dollar (USD) will continue to be driven by rival strength, but some US data later in the week could prove influential as well.
US housing data on Wednesday, as well as PMI projections from Markit at the end of the week, have the potential to cause Australian Dollar to US Dollar (AUD/USD) exchange rate movement.