The AUD/JPY pair is on the rise for the second consecutive day, reaching around 98.90 during the early European session on Friday. This surge is driven by the Australian Dollar (AUD) gaining strength against the Japanese Yen (JPY) due to improved risk sentiment following the robust recovery in US Retail Sales. The fears of a US recession have eased, boosting market confidence.
RBA Governor Michele Bullock’s hawkish comments are also contributing to the Aussie Dollar’s rise and supporting the AUD/JPY cross. Governor Bullock has indicated that the Reserve Bank of Australia (RBA) does not foresee any rate cuts in the near future, emphasizing the focus on potential upside risks to inflation. This stance has provided further support to the Australian currency.
Furthermore, positive data from China showing growth in Retail Sales in July has also played a role in bolstering the Australian Dollar, as China is a significant trade partner with Australia.
On the other hand, the Japanese Yen may see further gains as the Bank of Japan (BoJ) hints at a potential interest rate hike in the near term, supported by growth in Japan’s second-quarter GDP. However, political uncertainty in Japan, with Prime Minister Fumio Kishida announcing he will not seek re-election as the leader of the Liberal Democratic Party (LDP), could have a downside impact on the JPY.
Australian Dollar FAQs
For those interested in the factors influencing the Australian Dollar (AUD), here are some key points to consider:
- The level of interest rates set by the RBA is crucial for the AUD.
- The price of Iron Ore, Australia’s main export, also impacts the AUD.
- The health of the Chinese economy, as Australia’s largest trading partner, plays a significant role in the AUD’s value.
- The Trade Balance of Australia, reflecting its exports and imports, can influence the AUD.
Understanding these factors can help individuals make informed decisions regarding their investments and financial strategies. Keeping an eye on central bank policies, global economic trends, and geopolitical developments can provide valuable insights into the movements of currency pairs like the AUD/JPY and their potential impact on personal finances.