AUD has been hard hit along with Asian EM markets from imposition of US trade tariffs on China and is often viewed as a proxy for Chinese economic and financial risks, according to Greg Gibbs, Analyst at Amplifying Global FX Capital. Key Quotes “The effective borrowing costs for AUD in FX forward markets are even more elevated than BBSW. This reflects wider cross-currency basis swap, implying that Australian bank funding costs from offshore money markets are hitting new high spreads over domestic cash rates.” “On the one hand, higher bank funding costs raise the carry from long AUD FX positions and might be regarded as supporting the AUD. On the other hand, it cuts into Australian bank profits and creates pressure for banks to tighten credit conditions in Australia, potentially dampening economic growth, and delaying RBA rate hikes.” “If anything it appears that rising bank funding costs in Australia are undermining the AUD. This may reflect a view that rising bank funding costs represent a vulnerability in the Australian financial system to tightening global credit conditions. This is making the AUD trade more like an emerging market asset.” FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next Litecoin price analysis: LTC/USD dancing with the 61.8% Fibonacci; LTC derivatives land a listing on the London-based exchange, Crypto Facilities FX Street 5 years AUD has been hard hit along with Asian EM markets from imposition of US trade tariffs on China and is often viewed as a proxy for Chinese economic and financial risks, according to Greg Gibbs, Analyst at Amplifying Global FX Capital. Key Quotes "The effective borrowing costs for AUD in FX forward markets are even more elevated than BBSW. This reflects wider cross-currency basis swap, implying that Australian bank funding costs from offshore money markets are hitting new high spreads over domestic cash rates." "On the one hand, higher bank funding costs raise the carry from long AUD FX… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.