[adning id=”12070″]

[adning id=”12070″]

Major forces impacting AUD are largely China-related

Forces acting on the AUD (and other commodity linked currencies) independent of USD strength in September were largely China related.

The AUD in September 2021

Having ended August at 0.7316, AUD/USD made a high of 0.7478 on 3 September before tracking lower for most of the rest of the month. The AUD low was 0.7160 on 29 September, before pulling up to end the month at 0.7227, for an overall loss of 1.2%.

Early month AUD strength was largely a reflection of USD slippage, following first the response to what was considered a dovish speech from Fed chair Powell at Jackson Hole in late August, followed by a much weaker than expected US non-farm payroll release, the latter putting paid to thoughts that the Fed could formally announce the start of QE tapering out of the Sep.21-22 FOMC meeting.

In the event, the Fed chair Powell did all but announce that tapering would commerce before the end of the year, subject to an okay September employment report (due 8 Oct). The Fed meeting also contained a hawkish tilt, with half of the FOMC members now calling for a first rate rise in 2022. With a short delay, this saw US bond yields commence a significant move higher – by some 20bps over the month at 10-years – and with a further delay, a strengthening in the USD – to its highest levels in 12 months.

Forces acting on the AUD (and other commodity linked currencies) independent of USD strength in September were largely China related. This included the travails of China’s largest property developer Evergrande and what its potential collapse would means for broader risk sentiment (contagion risk), the broader China property sector and the implications for already-slowing China growth as well as commodity demand.  Iron ore prices came under acute downward pressure, from highs above $150 a tonne in late August to a low of $90 on 20 September (Singapore futures) – moves aggravated by sharply rising energy input costs for steel production – before recovering to end Sep. nearer $120.

The mid-month announcement of the AUKUS pact including  a major new nuclear submarine procurement plan infuriated France and China, France threatening to scupper negotiations over an EU-AU Free Trade agreement, but this failed to have any noticeable negative impact on the AUD.


Leave a Reply

Your email address will not be published.


Get breaking news delivered


Austrade Approved Business Events
AVAILABLE NOW APPLY BEFORE 30th MARCH 2021 (Condition apply)

  • ABF Events are approved and listed below have been certified by Austrade on the Schedule of Approved Business Events.
  • This allows exhibitors, sponsors, delegates and partners to participate in the Business Events Grant Program. Note event bookings need to be confirmed ASAP to participate in the grant program
  • The program provides 50% rebate (based on a minimum spend of $20k) for approved items including ABF event-media packages, exhibition stands, corporate function tables, delegate registrations.
  • Govt Grant applications are now open until the 30 March. Please contact ABF to discuss how we can assist, we have experts to assist grant applications.
  • Grant funding will cover up to 50% of eligible expenditure incurred in participating at pre-approved business-to-business events as buyers or sellers during the 2021 calendar year.  All grant applications must be submitted for approval via the following link: https://business.gov.au/grants-and-programs/business-events-grants
  • For further information please see this fact sheet.
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?