AUD/USD struggles to recover above 0.6800 despite trade optimism

Aussie recovers in tandem with risk appetite, as trade deal hopes rise.
White House Kudlow’s comments – the main driver behind risk recovery.
Next of relevance remains the US-China trade call, US macro data.

Dhwani Mehta FXStreet

The AUD/USD pair is seen consolidating its recovery from monthly lows of 0.6769 just under the 0.68 handle over the last hours, as the bulls await the US-China trade talks later on Friday for the next push higher.

WH Adviser Kudlow: US-China to the short strokes on a Phase 1 deal

The higher-yielding Aussie extended the overnight rebound and recovered 30-pips from four-week troughs after the risk sentiment was lifted on the back of fresh reports, citing that China lifted restrictions on the US poultry imports.

The recovery in the spot gained traction in the Asian trades, as risk appetite got a further boost after White House Economic Adviser Kudlow said that the US is closer to striking a trade deal with China. The pair caught a delayed bid on his comments and went to test the offers at the 0.68 handle.

Despite the renewed trade optimism, the 0.68 handle appeared to be a tough nut to crack for the AUD bulls, currently leaving the AUD/USD pair wavering a tight range just below the last. Meanwhile, the latest comments by the RBA Deputy Governor Debelle on the monetary policy also fails to have any impact on the Aussie. Debelle said that RBA needs to give more time for the policy to work while adding that lower rates have an effect on the economy through the exchange and lower debt payments.

The major will continue to get influenced by the risk trends, in light of any fresh trade developments, while the focus remains on the US Retail Sales data and trade talks for a fresh direction in the prices.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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