Australian Dollar Soft on Mixed Domestic Data, China’s Trade Conflicts

The Australian dollar was soft today, trading either flat or lower versus other most-traded currencies. Domestic macroeconomic data was mixed, giving no help to the currency. Better-than-expected economic releases in China were unable to provide a boost either.
The Melbourne Institute Inflation Gauge showed an increase of 0.3% in November after falling by 0.1% in October. The Australian Bureau of Statistics reported that company gross operating profits rose by 3.2% in the September quarter on a seasonally adjusted basis, missing the median forecast of a 4.0% increase. That was a significant slowdown compared with the previous quarter’s gain of 15.8% (revised positively from 15.0%). According to a report from the Reserve Bank of Australia, private sector credit showed no growth in October, the same as in September. Market participants were hoping for at least a small increase of 0.1%.
China’s PMI figures released today beat expectations. Usually, positive economic data in China helps the Australian currency because the Asian nation is Australia’s biggest trading partner. But that was not the case today. Analysts explained that it is likely due to China’s trade conflicts with the United States as well as Australia itself. The Trump administration announced that it is planning to add two big Chinese companies to its defense blacklist: major chipmaker SMIC and national offshore oil and gas producer CNOOC. Meanwhile, Australian trade minister Simon Birmingham said that he is planning to make a complaint to the World Trade Organization about China’s tariffs on Australian barley.
AUD/USD was about flat at 0.7379 as of 12:19 GMT today after rising to the high of 0.7407 earlier. EUR/AUD gained from 1.6188 to 1.6238. AUD/JPY traded at 76.86 after opening at 76.77 and rising to the session maximum of 77.11.
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