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Webinar: Economic, Geopolitical Event Risks Vie for Influence

Webinar: Economic, Geopolitical Event Risks Vie for Influence

2017-04-03 10:37:00
Ilya Spivak, Sr. Currency Strategist
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Talking Points:

  • Newly data-driven US Dollar facing back-to-back event risk
  • Status-quo RBA meeting may be a non-event for Aussie Dollar
  • Tense Trump, Xi meeting may stoke market-wide risk aversion

After weeks of near-singular focus on the so-called "Trump trade", the US Dollar appeared to return to data-driven dynamics with last week's release of revised fourth-quarter GDP data. This paves the way for amble volatility in the days ahead as ISM activity surveys, the latest jobs report, and minutes from the March FOMC meeting cross the wires.

The Reserve Bank of Australia is set to make a monetary policy announcement. No change in rates is expected and the statement accompanying the decision will probably repeat a now-familiar mantra calling for patience with the current setting. That may amount to a non-event for the Australian Dollar, whereas the outcome of a meeting between US President Trump and his Chinese counterpart Xi Jinping could stoke fireworks.

Australia is near the start of the supply chain that runs through the world's second largest economy and to the first. An adversarial meeting that portends escalating tensions would threaten a key driver of Australian economic growth and undermine market-wide risk appetite, a doubly negative environment for the sentiment-sensitive Aussie.

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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