While a hawkish Fed boosts the USD higher, one currency stands out against this storm, and that is the Australian dollar, holding its ground and not retreating.
The Aussie has two good reasons to rise. The economy grew by 1.1%, in Q4 2016, much stronger than 0.8% expected. It is also a big bounce from the contraction of 0.5% that was recorded back in Q3. While that shrinkage of the Australian economy caused only a few to worry about an outright recession, the big bounce is clearly good news.
Year over year, output expanded by 2.4%, also above 2% predicted. Australian analysts responded positively to the figures and found it hard to find anything to complain about.
The second piece of good news came from Australia’s No. 1 trading partner: China. The independent Caixin manufacturing PMI came out at 51.6 points, reflecting slightly stronger growth. China’s manufacturing sector imports from China. A score of 51.2 was expected.
AUD/USD currently trades at 0.7640. While this is slightly in the lower end of the 0.7610 to 0.77 levels, other currencies are suffering under the weight of the US dollar.
