AUD/USD jumps 30 pips as US considers currency pact with China
- AUD/USD added more than 30 pips to hit a session high of 0.6756.
- Risk assets have picked up a bid in response to talk of the US-China currency pact.
The bid tone around the AUD strengthening, pushing the AUD/USD pair higher by 30 pips on reports that the US is considering a currency pact with China as part of a partial trade deal.
As of writing, the pair is trading at 0.6746, having high a high of 0.6756 soon before press time.
The risk sentiment improved after a Bloomberg report said the White House is looking at rolling out a previously agreed currency pact with China as part of an early partial deal that could pave the way for a suspension of the planned tariff increase next week.
The currency pact would be followed by more negotiations on core issues like intellectual property and forced technology transfers, the people familiar with the matter told Bloomberg.
The news put a bid under the AUD, a proxy for China, at lows near 0.6720. The futures on the S&P 500 have also recovered losses. The index futures had dropped 1% in the early Asian trading hours on reports of US-China trade-talk fallout.
Apart from the currency pact headline, the Huawei news may be pushing the AUD and other risky assets higher.
The Trump administration is planning to issue licenses allowing some American companies to supply nonsensitive goods to the Chinese telecom giant Huawei. That could help cool trade tensions.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
