AUDUSD, NZDUSD Soar on Positive US-China Trade News Before NFPs
Asia Pacific Market Open Talking Points
- AUD, NZD up as China President, Vice Premier give positive trade talk news
- The US Dollar gained as German, Italian 2019 GDP growth estimates trimmed
- Later today, non-farm payrolls may fuel risk aversion and boost the Greenback
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Breaking News: AUD, NZD Rally Amidst Latest US-China Trade News
The Australian and New Zealand Dollars rallied in early Friday trade amidst the latest US-China trade talk update. According to Xinhua News Agency, China’s President Xi Jinping said that substantial progress has been made in negotiations with the US. Shortly after, it was also revealed that Vice Premier, Liu He, said that a new consensus was reached. The anti-risk Japanese Yen weakened.
Nikkei 225 futures popped on the announcement, though within the realm of trading leading into the update. Follow through will probably have to wait in the medium term. Earlier today, US President Donald Trump said that talks may continue for 4 to 6 weeks. There remains sticking issues on intellectual property for example.
Top Currency News Thursday
The US Dollar outperformed against its major counterparts on Thursday, rising against its European counterparts such as the British Pound, Euro and even the anti-risk Swiss Franc. The latter is typically seen as a regional haven when the outlook in Europe doesn’t look so well. Global growth concerns have been at this point reiterated by the major central banks, and today was in some ways no different.
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Over the past 24 hours, German and Italian 2019 GDP outlooks were trimmed. In the former, the nation’s leading institutes lowered growths forecast from +1.9% to +0.8%, more than a full percentage point. In the latter, Italy’s Treasury envisioned cutting economic expansion estimates from 1.0% to 0.1%. As a reminder, this nation is currently in a technical recession. You can see the Greenback’s performance below.
US Dollar Rises Against European Counterparts
Chart Created in TradingView
Friday’s Asia Pacific Trading Session
S&P 500 futures are now pointing a little higher heading into the remaining 24 hours as markets await US non-farm payrolls. The jolt in optimism that markets may get from welcoming US-China trade news could fade. US economic data is tending to underperform and this could open the door to a downside surprise. If this inspires additional global growth concerns, we may see the US Dollar catch a bid on safe-haven demand.
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--- Written by Daniel Dubrovsky, Junior Currency Analyst for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.