Australian Dollar Eyeing RBA Rate Decision and Trade War News
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AUD/JPY TALKING POINTS – AUSTRALIAN DOLLAR, RBA, TRADE WAR NEWS
- AUD/JPY trending higher from positive trade war news?
- Markets are eyeing the US-China trade war negotiations
- Australian Dollar in focus as RBA delivers rate decision
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Australian Dollar traders will be closely watching the RBA’s Cash Rate Target decision at 03:30 GMT. Concerns over slower growth and comments from officials indicate a continuation of a cautious and dovish approach to policy. Uncertainty over the trade wars and China’s economy have been a key source of concern.
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AUD/JPY has been trending higher since breaking through the December resistance and has gained over two percent. This might be a reflection of investor’s optimism over the outcome of the US-China trade talks following the Chinese Vice Premier’s visit to Washington last week. Washington and Beijing have until March 1 to reach an agreement before tariffs (up to 25 percent) are imposed on Chinese goods.
Slower growth in China and signs of weakness in the private sector has weighed on the Aussie and likely re-enforced the RBA’s dovish stance. This comes after reports from the beginning of this month – particularly in Building Approvals and Retail Sales – substantially fell short of expectations and sent AUD down. This only accentuates the broader downtrend AUD/JPY has been on since the start of last year.
AUD/JPY – Daily Chart
The pair may start looking to retest the 78.691-79.055 range as investors turn defensive amid the sour economic news. Traders will now likely be closely watching for comments from RBA officials and eyeing the developments between Beijing and Washington as the two economic superpowers race against the clock.
AUD/JPY TRADING RESOURCES
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--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.