Australian Dollar Scores A Boost While Asian Currencies Remain Quiet
On Wednesday, the trading price of the Australian dollar (AUD) recorded a major boost in value. The value of the AUD kept getting pushed higher, which kept increasing the investors’ excitement.
The value of the Australian dollar rallied so much that it managed to hit a five-month on that particular day.
What Caused the Upsurge?
The reason behind the upsurge was the strong rally that came into being after the release of consumer inflation data.
On Wednesday, the consumer inflation data for the fourth quarter was shared, which was higher than the expectations set by the economists.
Just when the value of the AUD was moving in the upward direction, the Asian currencies could be seen facing a decline.
The data confirms that most of the major currencies from Asia did not show much of a movement. Their movements were quite slow compared to the movement of the AUD.
The reason behind almost no movement in the Asian currencies is the fear that the traders have that is pertaining to recession.
Recession Fears are Growing
Things have started to look very bright and promising since the beginning of 2023, even when it comes to the global economy.
Still, investors and economists are fearful that they may witness a major pull when the recession hits. They are fearing that the recession may hit the entire world.
Initially, it was the economists based in the United States who were sharing speculations about their own country facing a recession.
Then the fear grew over to the entire North American region and soon, the entire West was talking about it.
Turns out, the Asian markets are also taking the recession speculations very seriously, although they have a very slight chance of facing a recession.
Still, the region is concerned about recession, which is not letting the traders, trade with all their might. It is causing a pull in the forex market and most of the Asian currencies are moving at a snail’s speed.
The economists recently highlighted that the Chinese economy had been making a fast recovery. They claimed that the Chinese economy was making a recovery much faster than expected.
If the Chinese economy grows, the rest of the Asian region would benefit from that. Despite such speculations, the Asian markets are fearing recession, which is why they are holding back while investing in crypto.
AUD’s 1% Jump
The data shows that the trading price of the Australian dollar has recorded an almost 1% surge in the latest forex trading session. After the jump, the Australian dollar has been pushed up to 0.7115 versus the greenback.
It is the strongest level that the Australian dollar has hit in more than five months. The report shows that in the month of December, the CPI inflation recorded a surge more than what had been expected.
The hike means that the Reserve Bank has continued with its interest rate hikes to keep the situation under control. The interest rate hikes would mean that the Reserve Bank would want to tame them better.
While doing so, the Reserve Bank would end up pushing the trading price of the Australian dollar. This is what has caused the Australian dollar to experience a major push against all major currencies.
How Have the Asian Currencies Performed?
The latest forex market data shows that the value of the Singapore dollar has recorded a 0.4% boost in the latest trading session. It is an almost 5-year high that the value of the Singapore dollar has hit against the US dollar.
The value of the Chinese yuan has not made any significant move as the country is currently practicing holiday trades. On the other hand, the offshore yuan has recorded a 0.2% surge.
The value of the Indonesian rupiah has dipped 0.5% against the dollar while the value of the Japanese yen has recorded a 0.2% dip.