In yet another setback to the hope of global economic recovery, the New Zealand and Australian dollars remained flattened among the mixed signals coming from the numbers released by regulators from the United States of America. According to the latest figures, the Australian dollar decreased by 0.9% and settled at $0.7210. This has come close to the heels of US yields which have now hit the highest level in the year. Find more details here about the best Australian forex brokers.
The performance of the Kiwi dollar is also along the same lines as it lost 0.8% and settled at $0.6798 on Friday. It was unable to hold on to the peak of the seven-week period, which was pegged at $0.6890. The data emerging from the Chinese economy exhibited that Coronavirus continues to impact the world’s second-largest GDP in a big manner. Specifically, from the viewpoint of retail sales in the month of December, numbers were really down, although output on the industrial front led to the recovery, with the economy showing better resilience there than the initial forecast.
The authorities in Beijing were cognizant of the situation, and that’s why they responded with the easing of monetary policy for overall economic activity to grow and expand for better output. China is the biggest exporting market for Australia, and the economic activity in the country is definitely going to put further emphasis on the value of the Australian Dollar in the future.
The policies related to the interest rate hike by the Federal Reserve are also going to have a significant impact on the prices of the Australian dollar. It is very much apparent that real hikes are on the horizon, and even a small squeeze on the liquidity can prove detrimental to the many currencies, including the Australian and New Zealand dollars, among others. In addition, data related to the employment number will get released this week. These numbers will have bearing on many factors, including the valuation of the currency and the future recovery of the economic situations in different countries and markets.
It will be interesting to witness how the rising US bond yield is going to impact the economic situation around the globe, including the valuation of currencies. In addition to the bond yields, the data related to the economic output, employment, and interest rates charged by the various Central banks are also going to have a significant impact on the variety of economic indicators considered to gauge the health of the industry. In sum, there’s no doubt that the overall economic recovery is apparent though there are some hiccups too (especially coming from the Chinese and US economies), which are keeping investors from feeling enthusiastic and positive about the overall situation.
Source: https://www.cryptonewsz.com/nz-and-australian-dollars-struggled-to-keep-afloat/