The Australian dollar, US dollar exchange rate has had a choppy week as the pair responds to the two steps forward one step back nature of the US — China trade deal headlines. The pair was trending lower on Friday, down 0.4% at the time of writing, pulling US$0.6850 into sight.

The Australian dollar (a G7 proxy for China) shrugged off a better than expected trade balance data from China on Friday. China’s trade surplus widened to $42.81 billion in October, ahead of the $40.1 billion that analysts had pencilled in. Imports fell 6.4% year on year in US dollar terms, whilst exports fell 0.9% in US dollar terms but rose in CNY terms.

Whilst the trade surplus increased, dismal import numbers are a cause for concern, indicating a weakening domestic demand. This is increasing fears of a deeper economic slowdown in the world’s second largest economy, which is weighing on demand for the Australian dollar.

Also hitting the mood for the Aussie dollar was the Reserve Bank of Australia’s monetary policy statement. The RBA has pushed back its timeline for lifting inflation to the target level of 2-3%. This means that the central bank is also pushing back the date when interest rates could start to rise again, dragging the value of the Australian dollar lower. There is no more Australian data due today. Trade headlines could drive the Australian dollar towards the weekend.

Will US Consumer Sentiment Boost US Dollar?

The dollar was on the front foot on Friday as investors digested the latest twist and turns in US — China trade headlines. Both sides have agreed to roll back already imposed tariffs at different phases of the trade deal. However, today the headlines were slightly more negative suggesting that there were still some issues to be ironed out before the phase one trade deal would be signed.

Dollar investors will now look ahead to the University of Michigan consumer sentiment report. Analysts are forecasting that sentiment increased in November to 95.9, up from 95.5 in October, as sentiment continues its recovery. Improved sentiment is being underpinned by a strong labour market and solid wage growth. Analysts are not expecting to see the impact of improved US — Sino relations reflected in the data yet. A strong reading could boost the dollar. This is because confident consumers spend more which boosts the economy and adds inflationary pressures.


What do these figures mean?
When measuring the value of a pair of currencies, one set equals 1 unit and the other shows the current equivalent. As the market moves, the amount will vary from minute to minute.

For example, it could be written:

1 USD = 0.6784 AUD

Here, $1 is equivalent to approximately A$0.67. This specifically measures the US dollar’s worth against the Australian dollar. If the Aussie dollar amount increases in this pairing, it’s positive for the US dollar.

Or, if you were looking at it the other way around:

1 AUD = 1.4739 USD

In this example, A$1 is equivalent to approximately $1.47. This measures the Australian dollar’s worth versus the US Dollar. If the US dollar number gets larger, it’s good news for the Aussie dollar. is a news site only and not a currency trading platform. is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on do not represent our views.