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.
ING describes itself as “mildly bearish” on the Australian dollar for next week; the bank’s one-month targets are 0.72 for AUD/USD, 1.6 for EUR/AUD and 1.075 for AUD/NZD.
Please note that the opinions of our authors are their own and do not reflect the opinion of Best Exchange Rates
and should not be taken as a reference to buy or sell any financial product.
General advice: The information on this site is of a general nature only. It does not take your specific needs or circumstances into consideration. You should look at your own personal situation and requirements before making any legal, accounting or financial decisions. The foreign exchange rates and products compared on this page and website are chosen from a range of products that bestexchangerates.com (BER) has access to and are not
representative of all the products available in the market.
We may receive referral fees in relation to your activity on the BER website however this doesn't affect the exchange rates or fees you are charged.
The use of terms "Best" and "Top" are not product ratings and are subject to our disclaimer.