• China deal could give Aussie dollar ‘temporary boost’

    Date: 2019.03.16 | Category: 苏州美甲美睫培训学校 | Tags:

    The signing of a free-trade agreement between Australia and China this week could give the Australian dollar a boost against the greenback, but most economists still maintain it’s longer term path is lower.

    After wrapping up hosting duties of the G20 summit in Brisbane, Prime Minister Tony Abbott is preparing to sign a free-trade agreement on Monday with China’s President Xi Jinping.

    HSBC chief economist Paul Bloxham said while the details are unclear, the free-trade deal (FTA) should be good for Australia’s economic growth and that should give the Australian dollar a lift.

    “The challenge is we don’t know what is in the FTA yet. But if it does include greater access for agriculture and services, producers and the relaxing of foreign investment in Australia, that combination should be somewhat supportive of the Australian dollar, in the short term,” he said. He added that he still sees the currency at US82¢ by the end of next year.

    The Australian dollar is trading around US87.43¢ against the US dollar, from US86.37¢ at the start of last week, and US93¢ at the start of September.

    The local currency rose about 2¢ against the Japanese Yen last week and is buying ¥101.8, with investor confidence growing in the wake of the Bank of Japan’s stimulus injection as it tries to encourage growth in its struggling economy.

    Global shares finished mixed at the end of last week. Japanese shares shot up 3.6 per cent over the five trading days as investors were also pleased at talk of a delay to the introduction of a 10 per cent increase in a sales tax.

    US stocks finished marginally higher, while European shares hardly budged.

    Australian shares are expected to gain 6 points when the local market opens Monday, according to the SPI Futures for December.

    The most significant move over the last week has been the continuing fall in oil prices. They are down around 30 per cent since June to their lowest levels since 2009.

    “The fall in oil prices is likely to push average Australian petrol prices below $A1.30/litre which would represent a saving to the average family petrol bill since June of $8 a week,” said AMP Capital chief economist Shane Oliver in a note on Saturday.

    It’s a relatively light week for economic data but of note will be the minutes from the Reserve Bank of Australia’s last meeting and a speech by Governor Glenn Stevens on Tuesday. Both will be watched for clues on interest rates and if the RBA airs any further concerns about the local currency or the property market.

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