AUDUSD fell significantly on Wednesday morning due to escalation of “trade wars” between The USA and China.
On Wednesday morning, the Australian Dollar is falling against the USD. The current quote for the instrument is 0.7408.
The first reason is that investors ignore favorable fundamental background due to more “trade wars” complications between the USA and China. The second reason is the decline of commodity prices, which results in sales of mining companies’ securities.
The statistics published in the morning showed that the Westpac Consumer Confidence Change was +3.9% in July after being +0.3% the month before. However, investors barely responded to the report while being focused on “trade wars”.
Yesterday, the USA announced that it was going to introduce extra fees of 200B USD total in addition to the ones that came into effect at the beginning of July. Remember that on July 6th, the USA introduced import duties for Chinese goods in the amount of 34B USD, thus making China furious. The next move is to be made by China: what is the country going to do in order to “defeat the attack” on its production and trade and how much will the USA and the currency market pay for it?
For both the Australian Dollar and the Yuan, “trade wars” are now one of the key aspects, which may continue as long as the USA and China will to “exchange courtesies”.