On Monday morning, AUDUSD is rising a little bit; the Aussie is not responding to the Chinese trade aggression.
The Australian Dollar is strengthening against the USD a bit on the last Monday of February. The current quote for the instrument is 0.7148.
There won’t be any significant statistics today that may attract investors’ attention. In such cases, they switch to other information, which is plenty right now.
In the long-term, market players should take into account additional political tensions between China and Australia, which are now starting to interfere with trade relations. China is very good in this, that’s why all these complications won’t be easy for Australia. We’re referring to the news that China decided to impose limitations on the import of Australian coil. So far, it was implemented only in one port, Dàlián, which accepts about 1.6% of the entire coil delivery from Australia. However, the tendency is rather alarming, because China has already announced its plans to limit the volume of coil imported from Australia to 12M tons.
It’s a “multimove game”. It started long time ago, last summer, when Australia, due to security reasons, refused to buy equipment for its 5G mobile networks produced by several Chinese companies, such as Huawei and ZTE. After that, the Australian government rejected a deal from China, which implied an acquisition of a large local company by its partners from China. At this point, China started responding: an investigation into Australian barley supplies suspecting dumping schemes. Later, the Chinese government decided to turn to coil.
It’s some kind of a small trade war. So far, it’s not very global, but meant to make an example. If necessary, either party may increase pressure on its opponent – there might be a lot of possible scenarios for that. Of course, it’s quite risky for the Aussie, but so far this risk is long-term and postponed.
Orgin: RoboForex
