Markets

Forex - Dollar Capped, Traders Await Fed Minutes

Forex - Dollar Capped, Traders Await Fed Minutes

Tensions arose in 2017 when Canberra accused Beijing of meddling in its domestic affairs, and the relationship suffered another setback previous year when Australia banned China's Huawei from its 5G broadband network. Plus, it's not all downside to Australia as it can sell coal to South Korea, Japan, India. Australia would account for most of the volume reduction as it represented over 75% of China's seaborne metallurgical imports in 2018.

However potentially dominating the attention of AUD investors next week will be the state of US-China trade talks, with the US now set to increases tariffs next Friday unless there is some kind of Breakthrough.

Australia is the world's number one exporter of coal, while China remains its biggest trade partner, accounting for almost 30 percent of Australian sales overseas.

Customs officials had strengthened quality and safety inspections of imported coal "in accordance with relevant laws and regulations" to better protect Chinese importers and ensure environmental safety, Geng said.

The dollar plunged more than 1% on the initial wire reports of the ban from the critical five Dalian ports, which threatens to derail an important swing market for Australian coal exporters.

Traders will be looking too for hints about how far and how fast the Fed intends to reduce its balance sheet., the Cleveland Fed President, said Tuesday that she was in favor of ending the this year, an outcome that would leave a substantial amount of crisis-era liquidity in the system, capping any rise in market interest rates.

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That move not only pushed up seaborne coking coal prices due to surging demand from China, but also resulted in buyers establishing longer-term business relationships with domestic miners to guarantee their respective supply. "They've come in largely in expectation with what the market was thinking". He didn't say whether China was targeting Australia specifically.

Australian Prime Minister Scott Morrison, who was traveling in New Zealand, told reporters that people needed to be careful about jumping to conclusions.

"There are a number of things happening in China relating to, how they plan, and moderate, if you like, imports versus their own domestic production", Mr Mackenzie said.

Reserve Bank of Australia governor Philip Lowe warned there would be "very difficult" economic consequences if the coal restrictions were a sign of a broader "souring" of the Australia-China relationship.

"Our channel checks so far suggest while there are delays in getting imported coal, it is still getting through", Hynes said in a research note Friday. Yancoal said it will not be impacted by the Dalian ban as it does not ship to the port. Glencore directed queries to the Minerals Council of Australia, which declined to comment.

"For now, Australian coal can clear customs", he said, declining to be named because of company policy.

CBA commodities analyst Vivek Dhar said the ban as it stands affects only a small percentage of Australia's coal exports, but the fear is the action will spread quickly. "We have to wait to see what the underlying reasons are", he said at a parliamentary hearing in Sydney.