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Market Update

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

AUD lower despite improved market risk appetite

Published January 21, 2019

Author: Dennis Li

On Friday, China announced it is planning to offer the US a more-than-$1 trillion increase in American imports over a six-year period. The US dollar rallied by 0.27% against a basket of 6 major currencies with the US Dollar index breaking through the 96.30 resistance level. Wall Street also had a solid session with all three major indices posting gains for the fourth straight week. Even though market risk appetite seems improved, the AUDUSD did not receive much support and continues to be under pressure from 0.7200.

With China to publish its 2018 Q4 GDP data and December retail sales data this afternoon and Australian employment data to be announced Thursday this week, it will be interesting to see if the AUD can continue to hang on to the current level or reverse further to 0.7100 against the USD.  

  • US consumer sentiment dropped in early January to its lowest level since President Trump was elected more than 2 years ago as the ongoing partial shutdown of the federal government and the recent volatility in financial markets stoked fears of a slowdown in US economic growth.
  • According to the EU trade chief on Friday, the EU is willing to discuss car tariffs but will not remove duties on farm products in trade talks with the US.
  • After OPEC detailed specifics on its production-cut activity to reduce world supply, oil prices rallied about 3% on Friday supported also by progress in discussions between the US and China on the trade war.