The Australian dollar continues to slide

Amer Ghazzal / Barcroft Images / Barcroft Media via Getty Images
  • The Australian dollar remains under pressure, undermined by renewed trade tensions between the United States and China.
  • The AUD/USD currently sits at a 6-week low after falling 2.1% last week.
  • The economic data calendar is quiet today, although the ECB’s annual central banking forum from Sintra, Portugal, gets underway. Chinese markets will be closed.

The Australian dollar remains under pressure, undermined by renewed trade tensions between the United States and China.

Here’s the scoreboard as at 7.45am AEST.

AUD/USD 0.7442 , 0.0002 , 0.03%
AUD/JPY 82.37 , 0.03 , 0.04%
AUD/CNH 4.7889 , 0.0011 , 0.02%
AUD/EUR 0.6417 , 0.0008 , 0.12%
AUD/GBP 0.5602 , 0.0001 , 0.02%
AUD/NZD 1.0722 , 0.0014 , 0.13%
AUD/CAD 0.9817 , 0.0004 , 0.04%

The AUD/USD 4-hour chart below provides a better overall indication of the recent price action.

Investing.comAUD/USD 4-Hour Chart

At .7443, it current sits at a six-week low, weighed down by soft Chinese and Australian economic data earlier in the week and, more recently, renewed trade tensions between the United States and China.

On Friday, the US government outlined a list of more than 800 strategically important imports from China, totalling $50 billion, that would be subject to a 25% tariff starting from July 6.

In response, China’s Commerce Ministry said it would retaliate with similar tariffs on 659 US products, according to the state-run Xinhua news agency.

As Ray Attrill, Head of FX Strategy at the National Australia Bank explains, the tit-for-tat trade war headlines hit commodities and commodity currencies particularly hard on Friday.

“Commodity prices, commodity currencies and Asian Emerging Market (EM) currencies bore the brunt of the tariff news,” he said in his Monday morning note.

“Base metals and oil were down across the broad and NZD, AUD and CAD off by on average 0.5%. The Korean Won lost 1.5% while the currencies of China, India and Thailand were all down more than 0.5%.”

A modest rebound in the euro, following Thursday’s ECB-initiated plunge, prevented the losses against the US dollar from being even larger.

After a busy end to the week, the data calendar slows to a crawl on Monday with no major releases except for Japanese trade data scheduled.

Chinese markets will also be closed for a public holiday.

However, while the data calendar is quiet, the central bank speaking schedule is not with the European Central Bank’s annual conference in Sintra, Portugal getting underway today.

ECB President Mario Draghi will open proceedings from 3.30am AEST.

Outside of Sintra, several US Fed officials will also speak, including outgoing and incoming New York Fed President Bill Dudley and John Williams.

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