The Australian Dollar has risen significantly against the US Dollar today, posting a 0.7% rise thanks to strong trading data from China.
This highly supportive data has put the AUD USD exchange rate at 0.7730, the best rate since November 2016.
Why is this so?
China has recently posted a rise in the June trade surplus along with increased lending during the same month. These figures have raised trader optimism about the Chinese economy and indirectly pushed up the Australian Dollar, given that China is Australia’s biggest trade partner.
What does this mean for the Australian Economy?
- If US inflation Drops there could be further Australian Dollar Gains.
- An appreciation of the Australian dollar against the Chinese dollar could lead to increased imports leading to a deterioration of BOGs.
- Possible increase in Foreign investment possibly increasing return on foreign equity