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Market Update

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

AUD supported by US-Mexico trade deal

Published August 28, 2018

Author: Dennis Li

Market sentiment improved with a preliminary bilateral trade deal between the US and Mexico. Talks also covered outstanding concerns on autos and labour rules. This deal is looking to replace the North American Free Trade Agreement (NAFTA), only requiring ratification from respective legislative bodies. Canada Risks being left out if they don’t come to the party.  US equities and the risk-on sentiment dominated the markets and supported the AUD, edging up near 0.7350 against the USD overnight.

  • US and Mexico reached a new Bilateral trade deal, the USD fell to a four-week low with the Dollar Index closing at 94.77
  • Improvement in market risk appetite sent the Nasdaq above the 8,000 mark for the first time, the technology sector also provided the biggest boost to S&P 500 reaching its record-high close. Carmakers and auto parts saw positive moves.
  • The CNH finished Monday afternoon trade near a 4-week high against the USD after the Chinese central bank revived a ‘counter-cyclical factor’ in its daily fixing to support the currency and news of a US-Mexico trade deal also gave hope to some easing of tensions between the US and China.