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Aussie bulls managed to stay resilient against a week of weak Australian economic updates, RBA rate cut speculation, and U.S.-China trade war fears.

Australia Headlines and Economic data
Tuesday:
- China appears to make veiled threat about rare earth minerals crucial to US technology industry
- The US-China trade war could slash economic output across the world – trade war fears, the fresh negative developments and its affect on the global economy are starting to take center stage, prompting more risk aversion behavior. Likely why we saw momentary broad selling among Aussie pairs, but it didn’t last long as the Aussie did slightly bounce higher against the majors in the U.S. trading session without a direct catalyst, likely on counter currency weakness.
Wednesday:
Thursday:
- Falling business investment, building approvals point to deepening economic slowdown
- The seasonally adjusted estimate for total Australian dwellings approved fell 4.7% in April
- The trend volume estimate for total new capital expenditure fell by 0.6% in the March quarter 2019 while the seasonally adjusted estimate fell by 1.7%.
- Australia sees the largest monthly decline in new home sales since September 2005
- China says US trade provocations are ‘naked economic terrorism’
- China makes next move in trade war, reportedly halting US soy purchases – more negative U.S.-China trade developments sparks further global risk aversion behavior, and likely the catalyst for the broad weakness in Aussie pairs.
Friday:
- Australian housing credit growth has never been weaker but a recovery could soon be on the cards
- Trump Says U.S. Will Hit Mexico With 5% Tariffs on All Goods – This surprise event from the U.S. sparked global risk aversion sentiment as it comes just a few hours after the U.S. administration submits its already agreed trade deal with Canada and Mexico to Congress for approval. Changing the terms on a whim is likely read by the global community that trade deals with the U.S. aren’t something to be relied upon, and this is arguably further de-motivation for China to lock up a deal with the U.S. quickly, hence the risk-off behavior and yen rally. This hit the U.S. dollar pretty hard on the session as it all potentially leads up to Fed rate cuts, and a weak Greenback is likely why we saw the Aussie briefly rally during the morning U.S. session.