Today we see the AUD/USD struggling to stay above .7200 as the bears claw their way out of hibernation. With not much data coming out and the US on a national holiday, we saw the Aussie retract. That and the growing coronavirus stimulus concern have got traders nervous. Throw China’s Trade Numbers into the mix and we have a recipe for a volatile Asia Session.
We have also seen a move by the Chinese central bank to cut reserve requirement rates. Although currency markets where startled by the decision on Monday, triggering a sharp yuan decline, analyst remain skeptical. Many analyst belive that the move will be short lived due to the growing strength in the economy. As China leads the world in the fight back from COVID-19, it is eating up capital flows. This will only strengthen their economy in the near to mid term causing the Yuan to appreciate further.
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