- AUD USD ignored negative trade news from China on Friday to hit new monthly highs.
- The excellent Australian containment of the Covid-19 pandemic is likely backing the coin alongside the NZD.
The AUD/USD It looks set to end the week on the upside and at its highest levels since early September, just below 0.7400. On the day, the pair was up 30 pips or 0.4%.
AUD ignored China’s trade woes
The Asia session on Friday saw some negative updates regarding Australia and China trade relations. First, China is reportedly going to hit Australian wine with tariffs that could double or even triple its price for Chinese consumers, making the product category “unviable” for Australian exporters, according to the Australian Trade Minister. , Simon Birmingham.
China’s Commerce Ministry said its investigation started in August, it had discovered that Australia was “dumping” wine into China and had caused substantial damage to domestic Chinese wine producers. Australia, of course, has criticized the decision.
Friday’s new tariffs on wine are the latest in a list of Chinese trade actions being taken against Australia, seen by many as China’s way of “intimidating” Australia into retracting its call for an investigation. independent on the origins of Covid-19.
Despite the fact that China accounts for 37% of all Australia’s wine exports, worth more than $ 800 million a year, the Australian dollar has been completely quiet. Instead, the coin opted to track a weakened USD by hitting new monthly highs just below 0.7400.
The AUD support, and seemingly beating the aforementioned negative news on trade relations with China, has been further proof of the excellent containment of the pandemic in Australia. In fact, this week Victoria was declared virus free after no new cases were reported for 28 days.
Given how well Australia and New Zealand have contained the pandemic, it is perhaps not surprising to see the AUD and NZD as by far the two best performing currencies for the month.
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