During the mid-Asian session, Tuesday (7/14), demand for the Australian Dollar strengthened significantly against the US Dollar. The positive note managed to bring the pair up towards 0.6945. One of the driving catalysts is that Chinese economic data are reported to be better than previously predicted.
This positive note is also the end of the decline for three days without pause. Data on Chinese trade for June jumped quite high. It illustrates that the Chinese economy is trying to take a reversal momentum after yesterday's pandemic crisis.
The export rate has risen to + 4.3% higher than before at + 1.4%. In addition, import data is also higher to + 6.2% compared to the previous data at -12.7%. In addition to Chinese economic data, the stronger Australian Dollar also received a catalyst for domestic Australian data that satisfied investors.
Data on the confidence and business conditions of each experienced an improvement. Data on NAV business conditions rose to -7 higher than before at -24 and business confidence also rose to 1 from before at -20.
Factors Influencing the Rise of the Australian Dollar
Today's rise in the AUDUSD is also likely to take a positive tone from the risk assets of the S&P 500 futures contract, which rose slightly by 0.15%. Although the risk benchmark movement, namely the yield of US Treasury bonds in 10 years is still declining.
An increase in cases that occur in the US actually also threatens the Australian dollar to strengthen at this time. But fortunately, the data of Australia and several other countries have not experienced a significant decline.
Another threat to the AUDUSD also comes from the problem of the US-China conflict which is heating up again. The two countries argued over the South China Sea issue claimed by China. US consumer inflation data appear to be a short-term driver.
Demand for the Australian dollar increases the risk-off living longer. The rise in the Aussie currency follows the upbeat tone seen in the verdant US futures contract. The tone of global optimism came after news of the Corona virus vaccine.
Moderna reportedly released clinical trial results with very satisfying results. The drug is able to provide protection for the victims. With the Australian Dollar rising, the AUDUSD pair is climbing towards 0.7014 when the Asian session takes place in the Asian session on Wednesday (7/15).
That level is the highest point since June 10, higher than this Wednesday's opening. Throughout today the pair has recorded an increase of 0.52%. Meanwhile, the S&P 500 futures contract also posted an increase of 0.80%.
The Increase in the AUDUSD is Overshadowed by Weak Data
Unfortunately, the increase in the AUDUSD pair today is still overshadowed by weaker-than-expected Australian data. In addition, conflicts between the US and China also weighed on the rising Australian Dollar at this time. Thus providing several benefits for the US Dollar as a global safe-haven asset.
Australian data on the Westpac consumer confidence index declined to -6.1% for July. Even though in July the data was + 6.1% so that this month's results disappointed global investors. One factor that undermines the data is probably because the increase in Corona virus cases is very significant in Australia.
The next AUDUSD movement will continue to try to find signals from global problems. One problem is the conflict between the US and China which has not subsided yet. President Trump seems to have imposed sanctions on Chinese officials for human rights violations. The Chinese government also reacted to the steps taken by the US.
Problems also arise ahead of the US presidential election next November. Because the US Supreme Court issued a ruling that the Parliament could access the financial records that existed at the US President. Thereby triggering political turmoil that quite has an impact on risk sentiment. This also triggered a strong wave of risk-off since last night.
