The Australian dollar was the best performing major during Friday’s European session. The “Aussie” rallied by as much as 0.8 percent to rates above 74 US cents after robust Australian economic data.
The Australian dollar was well supported on Friday after investors learned that Australian retail sales grew at an above-expected 0.4 percent for the month of June, and this added to earlier optimism that came in the form of surprise trade data.
Amid the backdrop of serious trade tensions between the US and China, Australia announced exports to China for the year ending June-30 of A$10.34bn – the second highest on record and a remarkable 40 percent increase on data for the same month last year. This is a sign, says the South China Morning Post, that “the commodity-leveraged country is weathering the early stages of the tariff dispute between Beijing and Washington.”
The Australian dollar had fallen to a two-week low of 73.48 US cents early in the day, but had strengthened to 74.06 at the time of this report (16:00, GMT+1).
Better still, the Aussie strengthened to 1.5657 per euro, bordering on a six-week high versus the single currency, and it now buys 1.096 New Zealand dollars.
The biggest news of the day, that the US added only 157,000 new jobs in July, below market expectations for growth in the 190,000 region, also supported the Australian currency. The US dollar as a whole weakened by roughly 0.4 percent, as measured by the US Dollar Index. US earnings growth (an important measure for Federal Reserve policymakers) came in as predicted at 2.7 percent, unchanged from June.
Next week’s news flow will be predominantly RBA-related. Australia’s central bank announces interest rates on Tuesday, Governor Lowe speaks on Wednesday, and Friday brings with it a statement on monetary policy and the bank’s latest economic projections. RBA rhetoric will likely be centered on the uncertainties surrounding global trade and the Chinese economy.
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