Weak trade balance figures out of China were seen to impact a number of currencies, as certain movements reaffirmed the influence that the world’s second largest economy has on the global marketplace. Data showed that Chinese exports unexpectedly fell, registering the biggest trade deficit in 2 years; this was also accompanied by poor inflation data. As a result, we saw the Japanese yen strengthen as traders looked to sell-off riskier assets and buy in to the safe haven currency. Meanwhile, the Australian dollar fell against almost all of its most-traded peers (bar a very weak sterling). With China being Australia’s main export destination, a slowdown in the Chinese economy is bad news for the export-reliant Australian economy.
The Canadian dollar was also relatively weak yesterday, as the currency still felt the impact of Friday’s poor employment figures.
Overnight last night we had business confidence figures out of Australia, and later today we have a monetary policy statement from the Bank of Japan.
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