US Dollar Moves on Fiscal Outlook, Is China Manipulating Yuan?

27 February 2017 by News Desk   |   SHARE  

The US dollar spent some time retreating towards the close of this week after US Treasury Secretary Steven Mnuchin’s statements caused a loss in greenback appetite say currency experts FC Exchange. Mnuchin stated that the effect of fiscal stimulus may be limited this year and allowed the Australian dollar to hit a fresh 2017 high, rising to US77.41¢.

Meanwhile, President Trump has delayed his announcement with regards to his immigration policy and investors in the buck will be monitoring his upcoming comments closely. Another factor that could cause USD movement will be Trump’s statement regarding tax cuts or economic plans when he addresses congress next week.

National Australia Bank (NAB) economist David de Garis commented: ‘The market is continuing to wait for the important details of the tax/fiscal plans, the absence of any infrastructure details, and that Mnuchin said that the step-up in growth to 3 percent may not occur until late 2018.’

The controversial US president also risked ratcheting up tensions between the US and China this week by stating that the Chinese were the ‘grand champions’ of currency manipulation. China hit back at the claims that it had intentionally caused yuan softness and Chinese scholars expressed their frustration at the comments.

China’s foreign ministry spokesperson stated: ‘If you must pin the label of “grand champion”… On China, then we are a grand champion of economic development. We’ve made great achievements since the start of economic reform and opening-up, making us the undisputed grand champion.’

The US dollar is likely to have an interesting week ahead with political developments heating up, meaning the AUD/USD exchange rate could be in for some unruly market swings as the market reacts to political disruption.

Disclaimer: This economic update is provided by FC Exchange a Global Reach Group Company, industry leaders in foreign exchange. Authorised affiliates are permitted to reuse content.

Learn more about the Australian Dollar – Contact FC Exchange: Get A Quote

Want to live and work Down Under? Click here for expert help: Skilled Migration to Australia

Want to get a job Down Under? Click here for expert help: How to Get a Job in Australia

Click here for expert help with travel visas: Travel Visas to Australia

Click here for tourist information about Australia: Visit Australia