The Australian dollar is down again for a 2nd day in todays trading session after a round of disappointing numbers out of China add to the case that the current trade wars between the US and `China are taking its toll on the worlds 2nd largest economy.
Chinese imports and exports during slumped during December which was bound to have an affect on the Aussie dollar as China is the biggest importer of Australian goods
"The trade numbers from China for December eliminated any doubt about the Sino-US trade war having a painful effect on the Chinese economy," says Amy Zhuang, chief Asia analyst at Nordea Markets.
As well as a slowdown in the Chinese economy, the risk of a rate cut from the Reserve bank of Australia is also going to weigh on the Australian dollar and all may be revealed when the latest inflation numbers are released from Australia on Wednesday.
Another figure below 2 percent which is the RBA’s target rate would spell bad news for the Australian dollar and really put pressure on the central bank to ease monetary policy
"A soft inflation reading for Q4 would keep it entrenched below target. If the RBA meeting offers any suggestion that the central bank is less confident the next move in rates is more likely to be up, the AUD would likely crack lower," says Tom Nash, a currency strategist at HSBC in Australia.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 61% of retail investor accounts lose money when trading CFDs with this broker. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 61% of retail investor accounts lose money when trading CFDs with this broker. Before deciding to trade foreign exchange you should consider whether you understand how CFDs work, your investment objectives, your level of experience and readiness of taking risk. The possibility exists that you could sustain a loss of some or of all of your initial investments and therefore you should not risk more than you are prepared to lose. Please seek independent financial advice if necessary.
|By clicking "Continue" you will be redirected to the website operated by FIBO Group, LTD company registered in BVI and regulated by FSC. Please familiarize yourself with the Customer Agreement through the link. Click "Cancel" to remain on this page.|