AUD falls due to increase of tariffs by China
Thursday 1 January, 1970
Daily Currency UpdateAUD - Australian DollarThe AUD moved lower through trade on Monday to hit a one-week low of 0.6942 against the USD. Falling from an intraday high of 0.6996, the AUD was largely affected due to China retaliating by increasing tariffs on $60 billion worth of US imports by up to 25%. This plunged the markets into a risk-off mode overnight, where investors flocked to FX safe-havens such as the Japanese Yen and Swiss France. The sentiment is that there potentially may be some benefits to Australia in terms of trade, as the US and China continue to cut each other off. However, those benefits are looking to be outweighed by the general slowdown in global growth.Looking ahead, the Australian Bureau of Statistics is set to release the quarterly Wage Price Index just before noon on Wednesday. Expected to have a major impact on the AUD, the price index tracks the changes in the price businesses and government pay for labor. It is a leading indicator of inflation, as higher labor costs are usually passed on to the consumer.
Key MoversThe focus has been on the continuing US-China trade war, as the US threatens to put a tariff on auto imports with a decision to be made by the 18th of May. EU Trade Commissioner Malmstrom expects President Trump to defer this deadline and has stated they are working on a list of €20 billion worth of goods as retaliatory tariffs.The JPY and CHF spiked due to the trade war, as investors went into risk-off mode overnight, selling off riskier currencies. The Yen hit a one-week high of 0.009168 and the Franc of 0.9945 against the United States Dollar.The UK Office for National Statistics is scheduled to release the monthly Average Earning Index report tomorrow evening. Expected to have a major impact on the Pound, the report shows a 3-month moving average compared to the previous year, and is a leading indicator of inflation.
- AUD/CAD: 0.9320 - 0.9375 ▼
- AUD/EUR: 0.6145 - 0.6200 ▼
- AUD/GBP: 0.5325 - 0.5380 ▲
- AUD/NZD: 1.0530 - 1.0600 ▼
- AUD/USD: 0.6900 - 0.6970 ▼