How Long Can Aussie Gains Last with Softer Chinese Data?
Aussie is a bit higher today against major currencies, carving out gains. However, there are concerns about how long the Down Under currency can maintain its gains with softer Chinese data intruding on the scene. Additionally, there is the chance that general risk aversion will weigh on the Aussie as European troubles continue.
Right now, the Australian dollar is enjoying some gains after last week’s huge drop. However, the Aussie relies heavily on the Chinese economy, since China is a major trading partner. When the Chinese economy is expanding, demand for Australian goods is high and the Aussie is supported. However, Chinese growth has been slowing, and economic data out of China has been disappointing.
And, of course, against some currencies, the Aussie is likely to see trouble due to the general risk appetite in the wake of continued struggles in the eurozone. Also not helping the Aussie right now is lower commodity prices. Aussie is a commodity currency, and the struggles commodities have been facing (especially gold) are not helping the situation. The New Zealand dollar is also susceptible to concerns about the Chinese economy and drop in commodities.
At 14:01 GMT AUD/USD higher at 1.0255, up from the open at 1.0185. EUR/AUD is down to 1.1958 from the open at 1.2029. AUD/NZD is up to 1.2855 from the open at 1.2823.
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Earlier News About the Australian Dollar:
- Aussie Weakens Ahead of Employment Report, Pares Losses (2012-07-10)
- AUD Jumps to More Than Four-Month Record vs. EUR (2012-07-04)
- Aussie Climbs with Stocks & Commodities (2012-07-04)
- Aussie Retreats as Market Mood Worsens (2012-07-03)
- Aussie Rebounds on Positive Outlook for Australia's Economy (2012-06-26)