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Key Foreign Exchange Drivers in Canada, the UK, China, and Australia

PART:
1 2 3 4
Key Foreign Exchange Drivers in Canada, the UK, China, and Australia PART 1 OF 4

The Australian Dollar Ends on a Positive Note after Mixed Data

Australian dollar finishes in positive domain after data releases

The Australian dollar was trading at a lower note before picking up momentum to end positive against the US dollar on September 8, 2015. Even though the NAB (National Australia Bank) business confidence index fell to a low level of +1, the other index, which measures business conditions, exhibited a positive jump. The impact can be credited to a depreciated Australian dollar.

Also, the Reserve Bank of Australia has kept interest rates low, thus providing liquidity to the investments in the segment. Data regarding unemployment rates and change in the employment scenario is expected to provide further direction to the currency pair.

The Australian Dollar Ends on a Positive Note after Mixed Data

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Business conditions increase while confidence declines

The NAB business confidence for August fell three points from +4 to +1, echoing the depressed global outlook as commodity and crude prices have been falling. The slowdown in China also contributed to the sentiment. However, the more important business conditions increased by five points in August from +6 to +11, thus offsetting the impact of the business confidence index on the Australian dollar.

Impact on the market

Australian ETFs on September 8, 2015, were trading on a positive note. The iShares MSCI Australia ETF (EWA) gained 4.56%, while the Guggenheim CurrencyShares Australian Dollar ETF (FXA) also rose by 1.55%.

Now let’s look at Australian American depositary receipts (or ADRs) trading in US markets, which were also on a positive trajectory. BHP Billiton (BHP) went up by 4.06%. In the mining sector, British-Australian multinational Rio Tinto (RIO) rose by 4.97%. Australian banking ADR Westpac Banking (WBK) fell 4.16%.

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