- AUD/USD holds in the 0.69 handle as the US and Chinese signing ceremony takes place with no surprises.
- Focus will now get back to the Federal Reserve and Reserve Bank of Australia.
AUD/USD is currently trading at 0.6913, the highs of the day, following a steep trip up from the lows of 0.6877 as the US/Chinese signing ceremony takes centre stage on the day.
We have seen a bid in the Aussie which has corrected from a low in the 0.6850s where it reached 0.6919 earlier in the week due to improved risk appetite with the equity market making record highs along with a pickup in key commodity prices.
We have not heard the exact details of the trade deal between the US and China as of yet, as President Donald Trump introduces the phase one signing of the deal, speaking in general of it. However, we heard yesterday that rollbacks in tariffs will not be part of it, so it is unlikely that we can see much more upside in purely based on the deal at his stage.
Central banks back in focus
The focus will now be back to the US economy and the Federal Reserve. It is too soon to speculate, but the Fed is tipped to hold rates throughout the year, although barring an unexpected negative shock to the economy, inflation pressures will be a thing in 2020, stemming from a positive U.S. output gap which could result in a less dovish rhetoric, potentially supporting the US dollar. However, the benign Consumer Price Index release, rates have been a little lower and the US dollar a little softer this week.
As for the Reserve Bank of Australia, the bush fires and damage to the economy could be a catalyst to bring a rate cut forward where a cut from 0.75% to 0.50% in February would pressure the Aussie. "The RBA’s 2.8% growth forecast for 2020 seems very optimistic (we are on 2.1%, consensus 2.3%)," analysts at Westpac explained noting that "markets price only a 45% chance of the RBA cutting next month."
AUD/USD levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
USD/JPY jumps above 156.00 on BoJ's steady policy
USD/JPY has come under intense buying pressure, surging past 156.00 after the Bank of Japan kept the key rate unchanged but tweaked its policy statement. The BoJ maintained its fiscal year 2024 and 2025 core inflation forecasts, disappointing the Japanese Yen buyers.
AUD/USD consolidates gains above 0.6500 after Australian PPI data
AUD/USD is consolidating gains above 0.6500 in Asian trading on Friday. The pair capitalizes on an annual increase in Australian PPI data. Meanwhile, a softer US Dollar and improving market mood also underpin the Aussie ahead of the US PCE inflation data.
Gold price flatlines as traders look to US PCE Price Index for some meaningful impetus
Gold price lacks any firm intraday direction and is influenced by a combination of diverging forces. The weaker US GDP print and a rise in US inflation benefit the metal amid subdued USD demand. Hawkish Fed expectations cap the upside as traders await the release of the US PCE Price Index.
Stripe looks to bring back crypto payments as stablecoin market cap hits all-time high
Stripe announced on Thursday that it would add support for USDC stablecoin, as the stablecoin market exploded in March, according to reports by Cryptocompare.
US economy: Slower growth with stronger inflation
The US Dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.