What another tumultuous week! On top of another month of strong employment data and reasonable wage data, we get another major bank changing their view on the official cash rate. Then on top of this, news surfaces about the Chinese banning coal imports from Australia which sent markets into a spin.
The Australian dollar had a wild ride last week and shows why it’s the world’s most volatile major currency over the last month, its value swinging almost 2% in the span of a few hours last Thursday / Friday alone (refer chart below). The AUD soared 0.6% on a better than expected employment number last Thursday, forcing traders to close short positions. However, just 42 minutes later, it plunged when Westpac’s chief economist Bill Evans changed his view on the RBA cash rate, now saying the RBA may cut rates twice this year. The currency managed to erase part of the sell-off before falling again on a news report from Reuters that said China’s Dalian port customs has banned Australian coal imports indefinitely.