The Australian dollar is extending its losses versus the US dollar on Friday. The Aussie dollar US dollar exchange rate is trading at multi-week lows of US$0.6764. The pair is on track to have lost 0.3% across the week. This will be its fourth straight week of losses.
The Australian dollar continues to hover around six-week lows struck in the previous session. Investors are still awaiting fresh developments on the trade front. However, the waiting game is taking its toll on investor sentiment.
It is worth recapping the most recent developments in the ongoing trade dispute. On Wednesday evening after the US markets closed, President Trump approved the Hong Kong bill, signing it into law. The bill which supports the human rights of the pro-democracy protesters in Hong Kong raised doubts over a possible trade deal between the US and China.
The timing of Trump signing the deal is important. It was the start of the Thanksgiving holiday, when markets are closed. This means that traders haven’t reacted to the news. There is a possibility that they won’t react either. China has threatened to retaliate but so far has not taken any action. Even so, concerns that the developments may slow progress towards a trade deal is weighing on China Proxy the Australian dollar.
Dollar Investor Look To Next Week In Quiet Session
The US dollar has been subdued over the past two sessions owing to the Thanksgiving break. Most dollar traders are away from their desks not to return until Monday, the start of December. This past week the US dollar has crawled higher on the back of stronger economic data and trade headlines.
Next week dollar investors will focus on the US jobs data release on Friday, the non-farm payroll. This is the most closely watched macro data point of the month. With US GDP surprising to the upside, investors will be keen to see whether the solid economic growth is translating into stronger job creation growth and higher wages. Prior to the non-farm payroll there are other notable data releases such as the ISM index and ADP Employment report which will also attract attention. Signs that the US economy is on a solid footing could boost the dollar.
|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.