- The Aussie dollar has fallen against the greenback for the sixth straight session.
- Westpac senior currency strategist Sean Callow said that aside from broader USD strength, lower commodity prices may also be weighing on the AUD.
- Chinese stocks are also falling, as gains in US stocks failed to translate into improved risk appetite on Asian markets.
The Aussie dollar is under pressure this afternoon in Asian trade.
It’s on track for a sixth consecutive fall against the US dollar, as the greenback continues to push higher against all the major pairs.
That brings the Aussie’s weekly decline against the USD to around 3%, and it’s now trading at the lowest level since January 2017.
A short time ago, the AUD was teetering above 72 US cents. Here’s today’s price action on a five-minute chart:
Trade war fears?
Westpac senior currency strategist Sean Callow told Business Insider that weakness in the Aussie appears to be linked to softer commodity prices as markets more or less ignored this morning’s wage data.
“Yes, US dollar strength is key and AUD normally under-performs the G10 currencies at such times, but it does seem to be punished rather hard,” Callow said.
“There was no impact from wages data, about all I can point out is the renewed pressure on key commodities.”
“Spot iron ore has fallen for 5 straight days, gold continues to slide, and copper futures are at the lowest level since June 2017,” Callow said
“This gives the impression that commodity markets are pricing in a deteriorating outlook. Perhaps trade wars are still the focus?”
Asian markets rattled
IG Markets senior strategist Ilya Spivak told BI that falls in the AUD can also be attributed to another round of risk-off sentiment in Asian trade, stemming from ongoing tensions between the US and Turkey.
“The Aussie fell alongside most Asia Pacific shares and the Turkish Lira after Ankara announced a round of retaliatory import tariffs against the US,” Spivak said.
“That seems to have triggered renewed risk aversion, which is usually bad news for sentiment-geared commodity bloc currencies. Tellingly, the US Dollar and Yen are up alongside Treasuries and S&P500 futures are under pressure.”
Along with another bout of weakness in the Aussie, markets in China are looking shaky with the Shanghai Composite index continuing its slide after the lunch break.
China’s on-shore traded renminbi rose has climbed above 6.9 per US dollar, and briefly fell to its lowest level since May 2017.
Stocks in Hong Kong and Japan also failed to get a boost from a positive session in the US.
Tech shares led declines in Hong Kong, as internet giant Tencent Holdings dipped by a further 3% after China banned sales of a new video game.
With the AUD under pressure in Asian trade, it remains to be seen whether UK traders will push it lower when they arrive at the desk later today.
The last time the Aussie closed below 72 US cents was January 3, 2017.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.