The AUD/JPY currency pair declined on Monday, influenced by Trump's trade actions, China's economic slowdown, and anticipation of Australian inflation data.
The AUD/JPY currency pair experienced a decline of 0.32% on Monday during the Asian trading session, reaching approximately 98.10. This downward movement can be attributed to several factors, including the prevailing uncertainty surrounding the consequences of US President Donald Trump's trade and immigration policies. The Japanese Yen (JPY) benefited from safe-haven flows, strengthening against the Australian Dollar (AUD).
Investors are closely monitoring the Australian Q4 CPI inflation data, scheduled for release on Wednesday, for any indications that could influence the trajectory of the AUD/JPY cross.Trump's actions on Sunday, imposing retaliatory measures on Colombia, including tariffs and sanctions, due to the South American nation's refusal to allow deported migrants to land, have added to the global economic uncertainty. While the White House clarified on Monday that Colombia has agreed to accept the deported migrants, the initial tensions have contributed to a flight towards safe-haven assets like the JPY. Furthermore, China's unexpected contraction in factory activity during January, reversing the growth observed in the preceding three months, has exerted pressure on the AUD. As China is a significant trading partner for Australia, the Chinese economic performance has a substantial impact on the Australian economy. The disappointing PMI data, according to Zichuan Huang, China economist at Capital Economics, highlights the challenges policymakers face in achieving sustained economic growth. The focus now shifts to Australia's Q4 CPI data, which could provide further clarity on the RBA's monetary policy stance. A weaker-than-anticipated outcome could increase speculation about a February interest rate cut by the Reserve Bank of Australia (RBA), potentially weakening the AUD further
AUD/JPY Australian Dollar Japanese Yen Trump Trade Policies China Economy Inflation Data Reserve Bank Of Australia
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