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Weekly Roundup: Record drop in Chinese factory profits fuels Australian dollar selling

currency-newsWeekly Roundup: Record drop in Chinese factory profits fuels Australian dollar selling
As Chinese factory profits recorded their worst decline on record this left the risk-sensitive Australian and New Zealand dollars on the back foot.

While there was evidence that the Chinese economy has started to move back towards a state of normalcy in recent weeks this failed to dull the impact of the negative figures.

Even so, the relative weakness of the US dollar ultimately helped to limit the potential for AUD and NZD exchange rate losses last week.

With fears of an imminent global recession still looking setting to dominate market focus for some time to come, though, support for the risk-sensitive currencies may remain muted.

The release of the Reserve Bank of Australia’s (RBA) most recent set of meeting minutes may put fresh pressure on the Australian dollar on Tuesday.

Evidence that policymakers are willing to take further monetary loosening measures to shore up the domestic economy could fuel a fresh bout of volatility for AUD exchange rates.

As New Zealand data will be thin on the ground this week the possibility of a greater New Zealand dollar rally looks distinctly limited, barring a major shift in market sentiment.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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