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Aussie reaches new month high as trade tension ease

Published September 21, 2018

Author: Dennis Li

As investors viewed the fresh US and China tariffs on imports as less harsh than initially expected, the overall market risk appetite improved pushing the Aussie up 0.34% to its new month high against the USD while it gave up almost all of Wednesday’s gains overnight against both the EUR and GBP.  The risk-on sentiment also sent the world stock markets broadly higher on Thursday with the Dow and S&P reaching new highs.

  • The number of Americans filing for unemployment benefits unexpectedly fell last week to a nearly 49-year low suggesting the US job market remains strong.
  • China plans to reduce the average tariff rate on imports from most of its trading partners as soon as October. The move comes in line with Beijing’s pledge that it would take measures to further increase imports.
  • According to China’s commerce ministry, Beijing hopes the US counterpart will show sincerity and take steps to correct its behaviour amid the intensifying trade war between the worlds two biggest economies. Meanwhile, Jack Ma, the co-founder Alibaba Group Holding Ltd said on Thursday that people should prepare for 20 years of China-US trade frictions.
  • The Argentine peso rose 3.2% against the USD on Thursday with optimism the country will strike a new standby financing agreement with the International Monetary Fund (IMF)
  • The EU consumer confidence fell by 2.9% in September, 0.9% more than expected.