AUD Weakens on Safe-Haven Demand Amid Strait of Hormuz Tensions
The Australian Dollar (AUD) weakened against the Japanese Yen (JPY) on Friday, halting its three-day winning streak. The AUD/JPY cross traded around 111.30 during Asian hours as the AUD lost ground due to a surge in safe-haven demand triggered by escalating tensions in the Strait of Hormuz.
China's June Trade Balance data released earlier this week presented a mixed picture, with a trade surplus of $112.5 billion beating expectations but falling short of the previous figure. Meanwhile, exports grew 23.9% year-over-year in July, while imports expanded by 27.5%, moderating from previous growth rates.
Rabobank's FX strategists maintain that there is still a risk of one more rate hike this year in November, which could keep the AUD's upside bias intact out to 12 months.