The Australian dollar fell to its 10-year low, mimicking the Japanese yen, which also fell to lows, as renewed hope that China and the United States will be able to return trade negotiations back on track.
The US currency was also supported by the needs of investors in rebalancing their investments at the end of the month, which helped to raise the dollar index to the highest level for the month - 98.555.
The Australian dollar, often seen as a proxy rate on the Chinese economy, fell by 0.31% to hit 0.67095, about a third of a cent above its 10-year low of $ 0.66775 reached on August 7th.
In addition to the Australian troubles, building permits in the country unexpectedly fell to a six-year low.
The New Zealand dollar fell by 0.30% to a four-year low of $ 0.6290. NZD became the worst G10 currency this month with a 4.1% drop.
The Japanese yen remained unchanged at 106.49 per dollar, slightly moving away from the low of this week 106.68, reached a day earlier.
On the eve, the Chinese Ministry of Commerce said that Beijing and Washington are discussing the next round of negotiations in September, which allowed investors a little upbeat, though, most likely, for a short while.
Washington should begin to introduce 15% tariffs on goods from China for $ 125 billion this Sunday, affecting a huge amount of consumer goods, from electronics to sneakers.
Investors fear that a growing trade dispute could lead the US economy to recession - a scenario that became more realistic this week after the inversion of the US bond yield curve, which is a very reliable indicator of the recession.
In addition, political risks from the UK to Hong Kong and the Middle East have increased risks for the global economy and are holding many investors in suspense.
Despite the dollar recovering against the yen this week, the Japanese currency showed the best results among the major currencies this month, moving up 2.2%. In second place was the Swiss franc, which this month added 0.7%, to 0.9879 per dollar.
The euro fell by 0.12% to 1.1043, very close to the four-week low of 1.1042 reached the previous day due to the sluggish eurozone economy and the likely weakening of the monetary policy of the European Central Bank (ECB) next month.
Christine Lagarde, the new president of the ECB, said on Thursday that the central bank still has options to lower interest rates if necessary, although this step could pose a risk to financial stability.
Inflation in Germany slowed in August, and unemployment rose, data showed on Thursday, adding signs that Europe’s largest economy has exhausted itself and strengthened expectations of the ECB’s new stimulus package next month.
GBPUSD: Sell. Entry point – 1, 2179. Take profit – 1, 2153. Stop Loss – 1, 2224.
USDCAD: Sell. Entry point – 1, 3304. Take profit – 1, 3286. Stop Loss – 1, 3335.
NZDUSD: Sell. Entry point – 0, 6298. Take Profit – 0, 6281. Stop Loss – 0, 6328.