From a long-term perspective the Australian dollar is currently trading around some of the lowest levels seen against the US dollar in over 17-years, as the currency has sold off against most major currency pairs over the past few months due to a number of reasons.
Oil Price Drop Affects Australian Dollar
The falling price of oil along with the global economic slowdown due to the spread of Covid-19 has resulted in a sell-off in AUD exchange rates, leaving the AUDUSD interbank level trading as low as 0.55 at its lowest level. At the time of writing the pair are trading just over 0.60, although over the last few years the Australian dollar has lost around 14.5% of its value against the greenback for the aforementioned reasons.
Better than Expected Chinese Economic Data Offers Support to the AUD
AUD exchange rates have improved from their lowest levels which were hit a few weeks ago though, and this is due to some surprisingly good economic data releases out of China which have come as a surprise due to the country being on lockdown for some considerable time. Chinese Manufacturing PMI was expected to read 45 but the figure released was 52, so a lot higher than expected and also demonstrates growth in the sector of the Chinese economy. With the Australian economy being heavily tied into Australia’s this is good news for the AUD, and with the Aussie economy being heavily export driven this news was received well down under as it could help the country avoid a recession. In February Chinese PMI hit an all time low so the rebound caused a reaction within financial markets.
The US is faced with the spread of Corvid-19 at the moment with much of the country on lockdown, and the number of fatalities being the world’s highest so there could be a downturn for the US economy on the horizon. Later today Manufacturing data will be released out of the US followed by Jobs data tomorrow which could impact USD exchange rates.
If you would like to know more on factors influencing AUD or USD exchange rates for an upcoming transfer, or would like to ask a question, feel free to contact directly using the form below. I’ll be happy to get in touch personally to discuss your enquiry.