Forex – Aussie Dollar Rises as Trump Downplays Chances of Tariff on Australia

© Reuters. – The Australian dollar rose against its U.S. counterpart on Monday in Asia and hovered near a more than two-week high.

The pair rose 0.2% to 0.6953 after U.S. President Donald Trump downplayed the chance of slapping tariffs on Australia. The New York Times reported last week that his administration is considering doing so.

“The Australian situation is interesting but the relationship is very strong,” Trump told reporters at the White House when asked about the report. “No, we’re doing a very special relationship with Australia.”

Australia’s retail sales data and the Reserve Bank of Australia’s decision are both due on Tuesday, while GDP data will be released on Wednesday.

The Mexican peso was little changed against the U.S. dollar today, after losing more than 3% on Friday after Trump vowed to impose a tariff on all goods coming from Mexico, starting at 5% and ratcheting higher until the flow of people ceases.

Meanwhile, the pair was down 0.1% to 108.15. The safe-haven yen recorded the biggest one-day gain in four months on Friday following the tariff news.

The was down 0.1% to 97.540, held back by data showing a rise in inflation, supporting the case for the Federal Reserve to keep interest rates unchanged.

The personal consumption expenditures (PCE) price index increased 0.3% last month, the biggest gain since January 2018. The core PCE rose 0.2%. Separate data showed that consumer spending is slowing after a temporary boost during the first quarter.

Investors will be looking ahead to Friday’s U.S. jobs report for May for sign of strength in the labour market

The pair and the both rose 0.2%. Monetary policy updates from the European Central Bank and Trump’s state visit to the U.K. is expected to be in focus later this week.

The pair was unchanged after China released a white paper on the weekend and blamed the U.S. for escalating the trade war.

Escalating trade war has not “made America great again” and “will only make things worse for all sides,” the paper said, as trade actions taken by Trump and his administration have done serious harm to the U.S. economy due to increased production costs.

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