The Australian dollar has received some support today, courtesy of China after last Friday’s sharp tumble against its US counterpart on the back of another stellar job’s report from the US that all but guarantees a rate hike from the US Federal Reserve this month.
Data out of America on Friday as reported by the U.S. Bureau of Labor Statistics showed the nonfarm payroll employment increased by 201,000 in August, while the unemployment rate remained unchanged at healthy 3.9 percent.
With a rate hike, basically a foregone conclusion this month, the chances have also risen of more rate hikes by the US Federal Reserve before years end which is not going to do any favours for the Aussie dollar.
Data out of China released earlier today showed CPI figures currently sitting at 0.7 percent which was well above expectations for a number 0.5 percent which is good news for the Australian dollar as China id Australia’s biggest trading partner.
The fate of the Australian dollar this week will be driven by 2 factors which are further tariffs against China which US President Donald Trump may announce at any moment now and Thursday’s unemployment report and Job participation figures.
Trump is expected to announce another further $200 billion of trade tariffs against China and if we go by the first round of tariffs that were introduced, are expected to hit the Aussie dollar hard.
If Australia’s unemployment rate moves higher or there are any surprises to the downside with the number of jobs created in the Australian economy last month we may see the Aussie dollar fall below US70c which has something the market hasn’t seen since early 2016