AUD/USD: Traders sit tight in anticipation of trade talks

We are closed in Sydney and China today, and meanwhile, AUD/USD is a touch soft in the open on Monday as we await trade talks to recommence this week. AUD/USD is currently trading at 0.6762, opening -0.11% at the start of this week. 

The sentiment for trade talks is not great. China was reported to have decided to not consider negotiating on some of the key sticking points.

"Vice Premier Liu He, who will lead the Chinese contingent in high-level talks that begin Thursday, told visiting dignitaries he would bring an offer to Washington that won't include commitments on reforming Chinese industrial policy or the government subsidies that have been the target of longstanding U.S. complaints, one of the people said," Bloomberg reported. 

Trade talks: There are still high hopes of progress

However, there are still high hopes of progress with the incentive for both sides to get a deal done increasing. "A full deal may not happen quickly but there is potential for an interim agreement on less contentious issues such as Chinese purchases of US goods in exchange for a rolling back of some US tariffs. CNY may form part of such an agreement," analysts at TD Securities explained. 

Meanwhile, risk-on sentiment had improved into the end of last week, supporting commodities and stocks which is a positive combination for the Aussie that trades as a proxy to both trade talks and performances in riskier asset classes. 

AUD/USD levels