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Selling AUDJPY
On Friday last week I highlighted the risk to the markets if Trump announced further tariffs on Chinese exports:
As, we already know by now if you are a regular FX follower, what’s bad for china is bad for the AUD. This is the largest impact for the AUD at the moment, as despited having some good data in the week (GDP, and Trade balance), all rallies have been sold. There are fears that households will feel the pressure of the growing debt, the raising of mortgage rates , slow inflation, and wages staying low all have led to AUD rallies being sold. If Trump gets a tweeting and calling down fire and tariffs on China, the AUD is going to feel the pain.
So, today we are at a crossroads as to where we go from here. Overnight the ranges have been subdued. The Nikkei is currently up 0.15%, so pretty flat out there at the moment. Taking a further look at AUD we see that prices of copper are continuing to fall.
Iron ore has pulled away from it’s peak in August and has been dropping throughout August with price having made a move back towards the highs recently.
AUD/JPY 1 hr chart Chart below