Australia, which has recently encountered quite a few economic problems.
The decline in sales was felt across all sectors due to austere spending by Australian consumers.
Retail sales rose 0.2% in February, below market expectations of 0.2%
Retail sales fell 0.4% month-on-month in March, the lowest level since August 2021.
At the same time, volatility in China's PMIs also means less demand for Australian exports, which weighs on the Australian dollar.
This, coupled with now fears that the RBA may cut interest rates before the Fed, has weighed on the Australian dollar.
Due to the different interest rates, a lot of money went to the United States, but also to Switzerland.
The US dollar posted its biggest gain since October 2022, hitting including the Australian dollar, which led to a sell-off in the Australian dollar
A series of effects led to a sharp drop in the Australian dollar
On the morning of April 17, the Australian dollar plummeted to 64 cents against the US dollar.
AUDUSD hit a fresh five-month low against the USD
On Tuesday, the Australian dollar fell 1.4%
It can be said that the Australian dollar has exploded!
This has caused a lot of Chinese concerns,
Some people say that Australia is going to rock bottom this year and will never be able to climb again.
Who knew that just a few days later, the Australian dollar would start to rise!
The Australian dollar regained its footing above the 0.65 mark against the US dollar and rebounded sharply above 4.72 against the yuan.
The increase also reached 1%.
Moreover, the Australian dollar rose for the third consecutive session.
Why did it suddenly go up?
Australian attitude
Australia's domestic inflation data came in higher than expected, triggering expectations that the RBA may delay interest rate cuts.
The Australian dollar rose on hawkish sentiment around the Reserve Bank of Australia (RBA) maintaining higher interest rates in 2024.
United States
Due to the large size of the U.S. financial market, the Federal Reserve, as the most influential central bank in the world, usually leads the global interest rate cut cycle.
The Australian dollar is closely linked to US monetary policy and the economy.
U.S. inflation data exceeded expectations, and Powell's speech meant that the Fed may delay cutting interest rates.
U.S. Treasury yields climbed to new highs in 2024 on the back of Powell's speech.
The data showed that U.S. retail sales rose more than expected, rising from 0.6% to 0.7%.
The U.S. consumer price index rose for the third month in a row, which supported the U.S. economy and continued to increase inflationary pressures.
The US dollar was boosted by stronger-than-expected US retail sales data, which weakened market fears that the Federal Reserve may ease monetary policy.
This has caused investors' expectations of when the Fed will start cutting interest rates to start delaying.
But the situation suddenly changed.
Just released data, the US jobless claims data showed that the number of initial jobless claims for the week ended April 26 was unchanged from the previous week at 208,000
The figure remained at its lowest level in two months, significantly lower than market expectations of 212,000, possibly giving the Fed the flexibility to postpone rate cuts.
U.S. nonfarm productivity grew 0.3% in the first quarter, compared to 3.5% in the previous quarter, below expectations of 0.8%.
Good data: Positive data would have a bullish reaction to the US dollar as it raised the Fed's range to maintain US interest rates higher and for longer.
But if the data falls, it will make all investors lose confidence in the United States.
The non-farm payrolls rate is declining, and the Fed has almost no chance of raising interest rates.
This is the weakest productivity growth since the January-March 2023 quarter.
Weaker-than-expected non-farm payrolls data will weigh on the dollar.
In terms of the Fed's attitude, there has also been a major change!
Just now, the Federal Reserve officially announced its interest rate decision.
As the market predicted, the Fed will not raise or cut interest rates this time
On top of that, Fed Chair Jerome Powell made several important points in his speech:
He said that the continuation of inflation in the United States has made the distance of interest rate cuts farther, and the distance to raising interest rates is farther than cutting interest rates.
Fed Chair Jerome Powell denied the possibility of further rate hikes, and the dollar began to fall.
This further bolstered inflation expectations, which in turn undermined confidence in the Fed cutting interest rates.
Powell did not provide a timetable for rate cuts, and it is likely that the Fed will not cut rates at all this year.
Powell denied the possibility of further rate hikes, which put pressure on the dollar.
Markets are hopeful of a rate cut in November, but that won't happen if inflation doesn't come down.
The tone of the US currency has changed, and the dollar has fallen, which has given the whole market a stimulant.
It has also given many non-US currencies a chance to breathe.
This has led to the rise of risk-sensitive currencies such as the Australian dollar
The Australian dollar is on a rollercoaster ride.
The Australians, laughing, began to flee en masse.
With the Australian dollar rising and the yen plummeting to record lows against the Australian dollar, there has never been a better time for Australians planning a trip to Japan, a popular Asian tourist destination, in the near future.
AUD/JPY rose 4.25% to an 11-year high of 103.64.
A mid-range holiday in Japan a year ago could have cost around $4,000, but now it would cost around $3,500 at the current retail exchange rate
In terms of value for money for travel, there's never been a better time for Australians to travel to Japan.
A seven-day solo trip to the Golden Triangle cities of Tokyo, Kyoto and Osaka during the previous cherry blossom season cost about $1,312 A$, but now it costs only A$1,156, which is $156 cheaper.
According to the latest data released by the Japan National Tourism Organization (JNTO),
The number of Australians visiting Japan between January and March this year increased by 46.3 per cent compared to the same period in 2019, and the number of Australian visitors increased by 87.4 per cent compared to March 2019.
In the future, the craze for Australian tourism to Japan will continue in 2024
Meanwhile, Australia's trade balance (MoM) in April showed a surplus of $5.024 billion.
Funding pressures eased, with the ASX 200 rising slightly on Thursday as heavyweights of financial firms rose.
On Friday, the ASX 200 rose for a second straight session, driven by positive overnight moves on Wall Street.
Following last week's stronger-than-expected inflation data, ANZ expects the RBA to start cutting interest rates in November.
Australia's largest mortgage lender, the Commonwealth Bank, has also revised its forecast for the timing of the RBA's first rate cut.
In the future, US monetary policy will be loosened.
The probability that the Fed will keep rates in the current range of 5.25%-5.50% during the June meeting has fallen to 85.8%, down from 90.0% a week ago, and the probability of a 25 basis point rate cut has risen from 9.7% to 14.2%.
The RBA is expected to hold its fourth consecutive meeting on Tuesday to keep the key policy rate at 4.35% and possibly until the end of September.
In all likelihood, Australia will cut interest rates once this year.
Then, if the Australian currency eases, asset prices will rise in the future.
At the same time, the Australian dollar appreciates, and it will become cheaper to buy goods from other countries and travel to other countries.
Australians, make a lot of money!