The Australian Dollar has managed to advance strongly against the US Dollar today, thanks to rising iron ore prices and vehicle sales.
The US Dollar has suffered recently compared to Monday; after a day of strong movement, USD has dropped off due to signs of an unhealable rift developing between the US and China.
AUD USD Exchange Rate Advance Comes as Chinese Davos Speech Blasts Future US Trade Policies
The Australian Dollar US Dollar exchange rate has advanced to 0.75 recently, thanks to iron ore prices remaining bullish and December’s motor vehicle sales rising above forecasts.
Although the recent boom in iron ore remains a mystery, CRU Consultancy Analyst Wang Di has observed that;
‘There has been an improvement in [market] sentiment since last week and I think there are more speculative forces at play’.
The US Dollar has dropped off after a previous strong start to the week of Donald Trump’s inauguration.
US news has been lacking of late, which has left economists to look forward to a United States under the Trump administration. This future has recently been cast in a negative light with regard to national trade, following a well-received statement by Chinese President Xi Jinping at the Davos World Economic Forum (WEF).
While not explicitly targeting Donald Trump, Jinping was nonetheless harshly critical of isolationist trade policies and anti-globalisation attitudes, both of which Trump’s economic policies have been steeped in.
Australian Dollar Outlook: Morning’s Westpac Confidence Stats could Boost AUD USD Further
The next notable Australian news will concern the Westpac consumer confidence change for January, which previously fell by -3.9% during December
Should this jump back into a positive range in the morning, then the Australian Dollar may be able to firm and hold its gains against the US Dollar.
US Dollar Expectations: Morning’s Fed Speech could Bolster USD ahead of Inflation Rate Stats
Incoming US news of note will be Wednesday morning’s speech from Fed official John Williams, who may well give some sign of how close the next Fed rate hike is.
Further ahead, early Thursday will bring inflation rate stats for December, which are set to rise and could trigger a pre-inauguration bounce back in the US Dollar Australian Dollar exchange rate.
Recent Interbank Exchange Rates
At the time of writing, the Australian Dollar US Dollar (AUD USD) exchange rate was trending in the region of 0.75 and the US Dollar Australian Dollar (AUD USD) exchange rate was trending in the region of 1.32.