- AUD/USD taking a hit on escalating trade tensions.
- Trump seeking to squeeze China in retaliation to COVID-19.
AUD/USD is trading at 0.6399, oscillating around 0.64 the figure following a drop to a low of 0.6393 from a high of 0.6452 and weighed by renewed sentiment pertaining to trade wars between the US and China.
AUD/USD has dropped below the 0.64 handle on the recent trade war headlines. More on those here: Trump: Will be able to report on whether China is fulfilling its obligations under trade deal in about a week or two.
The headlines follow the news earlier in the week whereby Reuters reported how the Trump administration is “turbocharging” an initiative to remove global industrial supply chains from China.
Lead paragraphs
The Trump administration is “turbocharging” an initiative to remove global industrial supply chains from China as it weighs new tariffs to punish Beijing for its handling of the coronavirus outbreak, according to officials familiar with US planning.
President Donald Trump, who has stepped up recent attacks on China ahead of the Nov. 3 US presidential election, has long pledged to bring manufacturing back from overseas.
Now, economic destruction and the US coronavirus death toll are driving a government-wide push to move US production and supply chain dependency away from China, even if it goes to other more friendly nations instead, current and former senior US administration officials said.
Meanwhile, analysts at Westpac explained that AUD is "highly positively correlated with global risk sentiment and a high beta anti-USD play, underperforming other currencies against the US dollar from February into late March, then outperforming markedly in April as equity markets rebounded sharply."
Official Chinese data indicates that the economic damage from Covid-19 was heavily concentrated in January and February, followed by a sharp rebound in March, at least in industrial activity. Further growth would of course benefit both China and Australia, whose iron ore exports to China surged in March.
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
EUR/USD extends gains above 1.0700, focus on key US data
EUR/USD meets fresh demand and rises toward 1.0750 in the European session on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
GBP/USD extends recovery above 1.2500, awaits US GDP data
GBP/USD is catching a fresh bid wave, rising above 1.2500 in European trading on Thursday. The US Dollar resumes its corrective downside, as traders resort to repositioning ahead of the high-impact US advance GDP data for the first quarter.
Gold price edges higher amid weaker USD and softer risk tone, focus remains on US GDP
Gold price (XAU/USD) attracts some dip-buying in the vicinity of the $2,300 mark on Thursday and for now, seems to have snapped a three-day losing streak, though the upside potential seems limited.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price.
US Q1 GDP Preview: Economic growth set to remain firm in, albeit easing from Q4
The United States Gross Domestic Product (GDP) is seen expanding at an annualized rate of 2.5% in Q1. The current resilience of the US economy bolsters the case for a soft landing.