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Market Update

EncoreFX’s daily market updates are written by our experienced and professional dealing team.

AUD gains support on optimism over the US-China trade talks

Published January 10, 2019

Author: Dennis Li

The US Fed indicated on Wednesday in its December meeting minutes it was willing to hold off on rate hikes amid concerns about global growth and subdued inflation resulting in the US dollar index which measures the USD against a basket of six major currencies dropping to its lowest level since October. Overnight we saw the AUDUSD rally by 0.56%, gaining further support above 0.7150 with market momentum improved on optimism over the US-China trade negotiations. However, according to a Reuter’s survey of up to 53 economics analysts, median predictions for 3 and 6 months of the AUDUSD have been lowered from 0.7300 to 0.7200; and 0.7400 in December compared with previous expectations of 0.7500.

  • The Sino-US 3-day trade talks wrapped up yesterday afternoon in Beijing with negotiators focused on China’s pledge to buy “a substantial amount” of agricultural, energy and manufactured goods and services from the US, according to the U.S. Trade Representative’s office.
  • China’s Central Bank governor Yi Gang said on Wednesday the policymakers have pledged to step up support for the economy this year by improving its policy transmission mechanism.
  • China’s finance ministry will propose an annual fiscal deficit target of 2.8 percent of the country’s GDP for 2019, up slightly from 2.6 percent target set for 2018.
  • The British PM Theresa May suffered an early defeat to her Brexit plan on Wednesday, when lawmakers demanded the government to come up with a plan B within days in case she loses a vote on her deal to leave the EU.