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
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • US Dollar Index reaches a multi-month high as markets strike a risk-off tone $USD $DXY https://t.co/m8AdjHztFX
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 93.13%, while traders in GBP/JPY are at opposite extremes with 70.14%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/GgwsfrU5lz
  • EUR/USD sheds 40-pips in a matter of minutes as the US Dollar strengthens broadly. Get your $EURUSD market update from @RichDvorakFX here:https://t.co/wIlo9Tbp7A https://t.co/It5iIFhMmL
  • Well, I don't think Powell will temper interest/concern around central banks having to pullback in the foreseeable future. Both 'taper tantrum' and 'operation twist' search interest charging higher: https://t.co/NK17S328F3
  • Indices Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Germany 30: -0.86% FTSE 100: -1.20% France 40: -1.27% Wall Street: -2.32% US 500: -2.53% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/KjNr7ongtX
  • Nasdaq now down over 3% today, confirming 10% correction territory. $QQQ
  • $USDCHF has continued to strength today, now above the 0.9280 level, trading around the highs hit in late September. The pair has performed strongly since mid February as US rates have continued higher, rising from 0.8900 by nearly 400 pips to its current levels. $USD $CHF https://t.co/qrHY8Sy2sf
  • Against the backdrop of rising bond yields, both the Bank of England and European Central Bank will meet over the next two weeks. Get your market update from @CVecchioFX here:https://t.co/bcdEfLJjJ7 https://t.co/vXmdohw4VK
  • Oil - US Crude IG Client Sentiment: Our data shows traders are now at their least net-long Oil - US Crude since Jan 06 when Oil - US Crude traded near 5,008.80. A contrarian view of crowd sentiment points to Oil - US Crude strength. https://www.dailyfx.com/sentiment https://t.co/5dv539nKye
  • US Indices are struggling again today. The Nasdaq is now down 10% from the record highs of mid February, entering correction territory. The $VIX has risen to its highest level since last week's bond market event. DOW -1.31% NDX -2.37% SPX -1.48% RUT -2.68% $DIA $QQQ $SPY $IWM https://t.co/VKbWrCcymL
US-China Trade War and RBA Guidance Sees AUD Plunge to 13-Month Low

US-China Trade War and RBA Guidance Sees AUD Plunge to 13-Month Low

Justin McQueen, Analyst

Australian Dollar Analysis and News

  • US-China Trade War Sees AUD Under Pressure
  • RBA Omits Guidance on Interest Rate Rise

For a more in-depth analysis on AUD, check out our Q2 Forecast

See how retail traders are positioning in AUD as well as other major FX pairs on an intraday basis using the DailyFX speculative positioning data on the sentiment page.

China says US Initiates Trade War

Market sentiment has soured considerably amid the latest escalation in the trade war between the US and China, which followed reports that the US are targeting fresh tariffs on Chinese exports valued at $200bln, while President Trump that 10% tariffs would come into effect if China does not change practices. In the wake of the reports from the US, high beta currencies, most notably the Australian Dollar plummeted to its lowest level since May 2017 given its large exposure to China. Additionally, the decline in industrial metals with iron ore and copper prices falling some 1.5% saw losses in AUD exacerbate (Australia largest exporter of iron ore).

China’s Retaliation to Keep AUD Pressured

China stated that the US have initiated a “trade war” and are not afraid to fight back. As such, China is preparing retaliatory tariffs against the US which will hit one of its most successful export sectors. US sale of oil, gas and coal to China have risen considerably and runs a trade surplus against China, however they now face a possible 25% levy. Headline risk continues to remain high with focus on whether or by how much China will retaliate to $200bln worth of tariffs from the US. Further escalation will likely continue to keep the Australian Dollar pressured.

US China Trade War & a Brief History of Trade Wars – 1900 until Present

The Impact of Tariffs and Trade Wars on the US Economy and the Dollar

RBA Omits Guidance on Rates

Overnight saw the release of the latest RBA minutes, largely the same from previous minutes. However, a notable development was that the RBA omitted the phrase that the “next move in the cash rate would be up rather than down”. This suggests that heightened uncertainty over trade wars is beginning to have an impact on the RBA’s outlook. Given that the Fed recently upped its rate hike trajectory in the short term (4 vs. Prev. 3 2018 rate hikes), this could see a further widening of the US-Australian bond spread moving in favour of AUD selling, US-AU 10yr bond spread wider by 25bps.

US-China Trade War and RBA Guidance Sees AUD Plunge to 13-Month Low

Source: Thomson Reuters

AUDUSD PRICE CHART: DAILY TIME FRAME (October 2016- June 2018)

US-China Trade War and RBA Guidance Sees AUD Plunge to 13-Month Low

Chart by IG

Near term support on the downside situated at 0.7328, which marks the May 2017 low, while a firm break through could push AUDUSD towards the 0.72 handle. Elsewhere, AUDJPY continues to remain very weak and looks at risk of breaking support at the 2018 low situated 80.50.

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

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

DISCLOSURES