The Australian dollar tumbled in overnight trade, falling heavily in line with substantial falls in global stock markets.
As at 8.10am AEDT, the AUD/USD currently buys .7188, a 1.48% decline from Monday’s opening level.
The Aussie is now on track to suffer its largest one day percentage decline since October 13, 2015.
The catalyst to spark the carnage – not just for the Aussie but risk assets in general – was renewed concern over the current state of the Chinese economy. Further weakness in the yuan, indicating that capital outflows from the nation may be accelerating, along with another poor manufacturing PMI print for December, saw concerns bubble to the surface.
Risk assets – particularly Chinese stocks – were hammered. The Aussie, seen as a proxy to the outlook for the Chinese economy, was not immune, losing substantial ground against safe haven plays such as the US dollar, Swiss franc and Japanese yen.
With no major data releases scheduled for the Asian region, all eyes will yet again be on the performance of Chinese markets on Tuesday.
The PBOC USD/CNY fix at 12.15pm AEDT, having been set at the weakest level in nearly five years yesterday, along with the opening of China’s stock market soon after at 12.30pm AEDT, will likely dicate not only where the Aussie will end today’s session but also risk assets as a whole.
Here’s the current Aussie dollar scoreboard as at 8.10am AEDT.
- AUD/USD 0.7188 , -0.0108 , -1.48%
- AUD/JPY 85.86 , -1.89 , -2.15%
- AUD/CNY 4.6965 , -0.0395 , -0.83%
- AUD/EUR 0.6635 , -0.0082 , -1.22%
- AUD/GBP 0.4881 , -0.0064 , -1.29%
- AUD/NZD 1.0652 , 0.0004 , 0.04%