News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Mixed
Oil - US Crude
Bullish
Wall Street
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • 🇬🇧 Markit/CIPS Manufacturing PMI Final (SEP) Actual: 54.1 Expected: 54.3 Previous: 55.2 https://www.dailyfx.com/economic-calendar#2020-10-01
  • Join @PaulRobinsonFX 's #webinar at 5:30 AM ET/9:30 AM GMT to learn about how you can become a better trader. Register here: https://t.co/WeWGKtdlyz https://t.co/uFyzyIhums
  • Technical indicators are chart analysis tools that can help traders better understand and act on price movement. Learn more about the importance of technical analysis here: https://t.co/NpC1D8y4Aa https://t.co/0svzKoi26E
  • Heads Up:🇬🇧 Markit/CIPS Manufacturing PMI Final (SEP) due at 08:30 GMT (15min) Expected: 54.3 Previous: 55.2 https://www.dailyfx.com/economic-calendar#2020-10-01
  • 🇮🇹 Unemployment Rate (AUG) Actual: 9.7% Expected: 10.1% Previous: 9.8% https://www.dailyfx.com/economic-calendar#2020-10-01
  • 🇵🇭 Interest Rate Decision Actual: 2.25% Expected: 2.25% Previous: 2.25% https://www.dailyfx.com/economic-calendar#2020-10-01
  • 💶 Markit Manufacturing PMI Final (SEP) Actual: 53.7 Expected: 53.7 Previous: 51.7 https://www.dailyfx.com/economic-calendar#2020-10-01
  • 🇮🇹 Unemployment Rate (AUG) Actual: 9.7% Expected: 10.1% Previous: 9.7% https://www.dailyfx.com/economic-calendar#2020-10-01
  • 🇩🇪 Markit Manufacturing PMI Final (SEP) Actual: 56.4 Expected: 56.6 Previous: 52.2 https://www.dailyfx.com/economic-calendar#2020-10-01
  • 🇮🇹 Markit/ADACI Manufacturing PMI (SEP) Actual: 53.2 Expected: 53.5 Previous: 53.1 https://www.dailyfx.com/economic-calendar#2020-10-01
Australian Dollar May Not Have Much to Gain From US-China Deal

Australian Dollar May Not Have Much to Gain From US-China Deal

2020-01-15 02:00:00
David Cottle, Analyst
Share:

Australian Dollar, US-China Trade Deal Talking Points:

  • AUD/USD has risen sharply since October in anticipation of a trade deal
  • The Australian Dollar is ‘growth correlated’ so this makes some sense
  • However, the China/Australia trade relationship remains so strong that a US-China deal may not boost it much

Join our analysts for live, interactive coverage of all major economic data at the DailyFX Webinars. We’d love to have you along.

The Australian Dollar may well gain ground, along with other growth-correlated assets, on signs that the trade relationship between China and the United States is warming. However, Aussie watchers might do well to read the details of any trade deal very carefully.

Of course, as the currency of a country with obvious trade and political links with both Washington and Beijing, the Australian Dollar market has as much interest as that of any third currency in trade peace between the world’s two major players.

But trade war between them has not been all bad news for the Australian economy, even if it clearly weighed on AUDUSD in the first ten months of 2019. Tariff war saw China substitute many former US imports, and some of that substitution came Australia’s way.

Australian Dolalr Vs US Dollar, Daily Chart

For example, Australia became by far the largest single national supplier of Liquified Natural Gas to China after Beijing raised its tariff on US product to 25%, from 10% back in June. 2019 will be a banner year for Australian LNG exports to China, after two years of declines. Only Japan now buys more gas from Australia than China.

If trade war ends between China and the US, American LNG producers may well be back in this market with vigor.

China-Australia Trade Has Held Up Very Well

Moreover, despite an increasingly tetchy political relationship, trade links between Australia and China remain as strong as ever and have not been obviously hard hit by trade conflict elsewhere.

Australia’s value share of overall exports to China reached 38% in October last year, more than any other country, according to a study by the Australian National University. Staples such as iron ore and coal clearly had a very strong year. Widely reported industry figures showed that Australia provided no less than 74% of all Chinese imported iron ore in June 2019, a figure which has doubled over ten years.

In short physical trade between China and Australia already revs at extremely high speed. For all the goodwill a US-China deal may generate, it may not amount to a vast increase in capital flows between China and Australia which have remained high and may even have been enhanced, by last year’s trade war.

Australian Dollar traders will of course be free to cheer the deal. But they might also be very well advised to keep a close eye on the trade figures too.

How to Use IG Client Sentiment in Your Trading
How to Use IG Client Sentiment in Your Trading
Recommended by David Cottle
Improve your trading with IG Client Sentiment Data
Get My Guide

Australian Dollar Resources for Traders

Whether you’re new to trading or an old hand DailyFX has plenty of resources to help you. There’s our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There’s also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they’re all free.

--- Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or use the Comments section below to get in touch!

https://www.dailyfx.com/webinars?re-author=Cottle

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES