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G20 gives life to the AUD

Published December 3, 2018

Author: Hayden Carswell

A 90 day truce on tariffs between the US and China at the G20 meeting over the weekend gave the AUD life, up over 100 points from Friday’s lows. The underlying meaning is that the US will leave existing tariffs on $200 billion worth of Chinese goods at 10% and refrain from raising rates to 25% as planned on the 1st January. China agreed to buy agricultural, industrial and energy goods from the US with further discussions to come.

Furthermore at the G20, Russia and Saudi Arabia agreed to continue cooperation together in the oil market, this is in anticipation of demands to cut oil production and support prices at next week’s OPEC meeting.

In a busy news week, tomorrow we have the RBA Cash rate and Statement. Will the G20 outcome be enough for the RBA to change its tone on the AUD? The Bank of England is also speaking with any Brexit comments closely scrutinised. Other major data driving the market will be Australian GDP Wednesday, Retail Sales Thursday and US employment to round up the week Saturday morning.