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Asia Forex news roundup: AUD/USD maintains its upward trend

  • 27 September, 2021
  • 3:16 pm EEST

Asia Forex news roundup: AUD/USD maintains its upward trend

On Monday, September 27, 2021, forex news for Asia trading will be released.

Over the weekend, Australian Prime Minister Scott Morrison stated that closed borders between Australian states must be reopened after 80 percent double-vaccination requirements are met.
To cut a long story short, Morrison has no authority over the opening or shutting of state boundaries. Australian state borders are entirely within the jurisdiction of the states. Border issues are decided by the leader of a state (his or her administration). Morrison is the Federal Government’s leader, not a state leader.

Morrison does, of course, wield some power as the Federal Leader. However, he is not in a position to advise state officials on what they must do. Some state leaders are overjoyed to throw Morrison the middle finger, especially given Morrison’s atrocious mishandling of the vaccination rollout (over which he had control) that has put Australia at least three months behind the rest of the developed world in reopening.

Australia’s third-quarter economic growth will not be growth, it’ll be a contraction. This is due to extended lockdowns covering nearly 50% of the country’s population.

  • New South Wales (Sydney the capital city, Australia’s largest city) has been the epicentre of the 2021 outbreak
  • Victoria (Australia’s second-largest population state and home to the country’s second city, Melbourne) running second
Government authorities in NSW are now briefing businesses to prepare for ‘Freedom Day’, said to be October 11. This is slightly ahead of the day when the 80% double vaccination target is expected to be achieved in the state .
The Reserve Bank of Australia have said time and again that the 2021 outbreak ‘delayed not derailed’ the economic recovery. The delay is approaching its end and will prompt more substantial tapering from the Bank next year.

The news of a prisoner swap between Canada and China broke late Friday and over the weekend, after the US negotiated an accord with Huawei CFO (and daughter of the company’s founder) Meng Wanzhou. Meng was finally allowed to leave her Vancouver house, where she had been imprisoned, and fly back to China. Meanwhile, Canadians Michael Kovrig and Michael Spavor were brought back to Canada from their Chinese prison cells. Despite the fact that relations between the United States and China remain tight, this is an encouraging indicator. The AUD, as a proxy trade for China, seemed to welcome the news.

Following its gains on Friday, oil traded higher, benefiting the Canadian dollar.

Over the weekend and Monday, the People’s Bank of China poured cash into the banking sector once more. It is not uncommon for liquidity to be injected before of significant holidays in China (national holidays begin this week), and Evergrande ructions provide further fuel for injecting more money into the system.

In terms of the weekend, Bitcoin recovered much of its Friday losses during Saturday and Sunday, and it is currently trading slightly higher on Monday Asia time as I write this.

Because there was no obvious winner in Germany’s election, coalition talks are expected to last many weeks. Preliminary results show the SPD ahead of the incumbent CDU/CSU in terms of seats won, although neither party has a majority. In the 730-seat Buindestag:

  • 205 seats have been grabbed by the SPD.
  • CDU/CSU has 194 seats.

Throughout the session, gold has gained more than $10.

Some small change from late Friday levels; GBP, AUD and NZD all lower in the early hours :
  • EUR/USD 1.1725
  • USD/JPY 110.67
  • GBP/USD 1.3665 
  • USD/CHF 0.9250
  • USD/CAD 1.2650
  • AUD/USD 0.7247 
  • NZD/USD 0.6998

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