The Australian dollar, paired with the US dollar, declined markedly. The current AUDUSD exchange rate stands at 0.6612.
On the one hand, the downgrade in forecasts for China was a negative factor for Australia. The consensus at the Davos forum was that China would show modest economic growth in 2024. These cautious expectations are attributed to the ongoing crisis in the real estate sector, weak domestic consumption, and worsening conditions in the industrial production sector.
On Monday, China’s central bank kept the key interest rate unchanged, disappointing investors who had anticipated the first reduction in the indicator since August.
Australia is closely tied to China through trade and economic relations, making markets extremely sensitive to any negative developments from China.
On the other hand, the strengthening position of the US dollar is noticeably pressuring the Aussie. Investors currently favour safe assets, avoiding risks.