- Australian Dollar (AUD) under pressure following dovish comments from RBA’s Luci Ellis
- US – Sino tensions also drag on risk sensitive AUD
- US labour market hiring slowed in July
- Reports that US is considering sanctioning Hong Kong leader Carrie Lam sent US Dollar (USD) soaring
The Australian Dollar US Dollar (AUD/USD) exchange rate is trading lower on Friday. The pair is trading -0.7% at US$0.7185 at session lows. Despite today’s loss the pair is still on track to book gains of 0.7% across the week. This will mark its 7th straight week of gains.
Reserve Bank of Australia Assistant Governor Luci Ellis set the Aussie Dollar off on the back foot after saying that the economic recovery in Australia was expected to be slow and uneven. She added that the GDP could take years to return to levels seen before the coronavirus outbreak.
Adding to the downbeat mood for the risk sensitive Australia Dollar has been rising US -Sino tensions after President Trump took aim at Chinese tech. The US President signed an executive order to ban popular Chinese apps TikTok and WeChat in 45 days. This move could provoke retaliation from China ahead of the two sides meeting to discuss progress in the Phase one trade deal implementation.
Whilst elevated US – Sino tensions have dragged on the Australian Dollar, they have lifted the US Dollar as investors seek its safe haven properties. The pair tanked sharply on reports that the US is considering sanctioning Hong Kong leader Carrie Lam.
US Labour Department’s closely watched jobs report showed that 1.76 million new jobs were created in the US in July. This was above the 1.5 million that analysts had been forecasting. However, it was significantly lower than June’s record gain as a resurgence of coronavirus cases in some states from mid-June has hampered the economic recovery.
The US unemployment rate fell to 10.2% this again was better than expectations of 10.6% and 11.1% in June.