Budget drives aussie dollar up on global trading
Australia’s dollar strengthened against the U.S. dollar Thursday as President-elect Donald Trump’s budget promised to cut $100 billion in US defense spending, a reduction that economists expect to hurt investment plans.
The Australian dollar strengthened with a gain of around 9 cents to 86.35 US cents.
A weak dollar is seen as a setback for Australian exports as the country relies on imports from the U.S. and Europe for goods such as cars, computers and electronics.
Trump’s plan would have reduced a combined $50 billion from the Pentago부천출장샵n budget for 2018.
Australia’s foreign currency exchange rate fell to about 2.4.
“It looks more and more likely that the Trump administration will be putting Australia’s economic interests at a significant disadvantage with his policy proposals,” HSBC Australia chief economist Matthew O’Sullivan said in a note to clients, according to Reuters.
“That would have implications for Australia’s investment climate, and perhaps the country’s ability to attract additional US foreign direct investment.”
On Wednesday, U.S. Secretary of Defense Ash Carter met with President Barack Obama, who had been critical of Trump’s immigration plan.
“It will also increase uncertainty for U.S. employers in particular as they will be more reluctant to locate overseas to maintain a healthy workforce,” said Michael Newdow, chief U.S. economist at TD Securities in Sydney.