The Australian dollar bounced today following yesterday’s rout due to bad news from China. The gains were limited, though, and far from being enough to erase the Monday’s decline.
China injected a generous share of liquidity into markets, namely 130 billion yuan ($20 billion). The Australian currency often reacts strongly to news from China as the Asian nation is the biggest trading partner of Australia. As the Tuesday’s news was good, the Aussie moved higher.
Yesterday, the Australian dollar tumbled together with other commodity-geared and risky currencies as China’s economic data led to panic on Chinese markets that spilled over to other markets as well. With growing tensions in Middle East and global economic slowdown, the trading environment remains unfavorable to growth-related assets, including commodity-linked currencies.
AUD/USD rebounded to 0.7204 as of 3:23 GMT today after falling from 0.7283 to 0.7184 yesterday. AUD/JPY gained to 86.21 following the earlier drop from 87.56 to 85.82. EUR/AUD rallied from 1.4913 to 1.5055 on Monday but retreated to 1.5007 during the early Tuesday’s trading hours.
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