Donald Trump's latest tweetstorm has pushed the Aussie dollar higher

Justin Sullivan/Getty Images
  • The Australian dollar fell heavily on Friday before storming higher into the close.
  • A sharp turnaround in Chinese financial markets, recovering from losses seen earlier in the session, along with a Tweetstorm from US President Donald Trump, helped the Aussie to recover.
  • It’s held onto those gains in early trade on Monday. The economic events calendar is quiet today.

The Australian dollar is largely unchanged to start the trading week, holding onto the gains achieved in the second half of Friday’s trading session.

Here’s the scoreboard as at 7.55am AEST.

AUD/USD 0.7417 , -0.0004 , -0.05%
AUD/JPY 82.6 , 0.15 , 0.18%
AUD/CNH 5.0269 , 0.01 , 0.20%
AUD/EUR 0.6325 , 0.0014 , 0.22%
AUD/GBP 0.5650 , 0.0018 , 0.32%
AUD/NZD 1.0904 , 0.0036 , 0.33%
AUD/CAD 0.9742 , -0.0008 , -0.08%

After tumbling in early Asian trade following another selloff in the Chinese yuan, the AUD/USD reversed those losses and more in the latter parts of Friday’s session, ripping higher initially on a sharp and suspicious turnaround in Chinese financial markets and renewed weakness in the US dollar.

Here’s a 5-minute AUD/USD chart.

Investing.comAUD/USD 5-Minute Chart

Two Tweets from US President Donald Trump largely explain why the AUD/USD closed at .7421, up from a low of .7316 struck earlier in the session.

Here’s Trump’s initial salvo towards trade manipulators following an interview with CNBC in which he said he was willing to place tariffs on all Chinese imports entering the United States…

…and then towards the recent actions of the US Federal Reserve.

Combined, both Tweets weighed on the US dollar, helping not only the Aussie but also all other major currencies to scoot higher for the session.

“President Trump’s disparaging remarks for a strong USD look to have capped any potential gains for the greenback near-term,” says Rodrigo Catril, Senior FX Strategist at the National Australian Bank (NAB).

“After flirting with the idea of making a new year to date high on Thursday, the US dollar Index (DXY) is down more than 1%, closing the week at 94.62.”

Strong Canadian economic data, along with speculation the Bank of Japan (BoJ) may discuss tweaks to its asset purchase program at its upcoming monetary policy meeting, also helped to lift longer-dated government bond yields around the world, keeping the US dollar under pressure.

Turning to the session ahead, there is almost nothing on the economic data and events calendar that will be of interest to traders.

There’s also nothing scheduled in Asia, hinting the Aussie will continue to take it cues from movements in Chinese financial markets, especially the yuan.

Later in the day, Eurozone consumer confidence along with existing home sales from the United States are the only releases of note.

Given the quiet calendar, Trump’s Tweets could well dominate trade later in the session, presuming there’s new ones, of course.

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