Australian Dollar US Dollar (AUD/USD) Exchange Rate Sinks as Trump Delays US-China Trade Talks

AUD/USD Exchange Rate Falls as US-China Trade Talks Put Off

The Australian US Dollar (AUD/USD) exchange rate is down by nearly 0.5% today and is currently trading at US$0.7050 on the inter-bank market.

AUD weakened following news that the US and China would potentially push back trade talks until at least April, causing many Australian Dollars to remain nervous as the two superpowers struggle to meet a consensus.

US President Donald Trump said:

‘I’m in no rush. I want the deal to be right. … I am not in a rush whatsoever. It’s got to be the right deal. It’s got to be a good deal for us and if it’s not, we’re not going to make that deal.’

China is Australia’s largest trading partner, and an unresolved trade agreement weakens the risk-averse ‘Aussie’.

The Australian Dollar has also failed to benefit from the release of the Australian consumer inflation expectations figures for March, which came in better-than-expected at 4.1%.

These gains were overshadowed by weak Chinese industrial production figures for January, which came in below expectation at 5.3%.

The economic research consultancy, Capital Economics, gave a mixed statement, saying:

‘The latest data should partially ease concerns about a sharp slowdown at the start of the year. But the near-term outlook still looks downbeat.’

USD/AUD Exchange Rate Rises Despite Disappointing Jobs Data

The US Dollar (USD) managed to hold its ground against the ‘Aussie’ (AUD) despite today’s release of disappointing jobs figures, with the US initial jobless claims figures for March increasing above expectation to 229k.

These were followed by the release of the US continuing jobless claims figures for March which also came in at a worse-than-expected 1.776m – an increase on February’s 1.758m.

Today also saw the printing of the US new home sales figures for January which fell below the expected 0.620m to 0.607m, causing concern about the US economy for some ‘Greenback’ traders.

AUD/USD Exchange Rate Falls on US-China War of Words

Ongoing tensions between the US and China are continuing to weigh on the ‘Aussie’ (AUD) today, with China hitting back against recent criticism from the US State Department focusing on Beijing’s human rights record.

A spokesman for the Chinese foreign ministry, Lu Kang, said:

‘We also advise that the United States take a hard look at its own domestic human rights record, and first take care of its own affairs.’

With tensions running high between the two superpowers, this has weakened the Australian Dollar as traders’ risk-appetite continues to dwindle.

AUD/USD Forecast: ‘Aussie’ Could Benefit from Improving US-China Relations

‘Aussie’ (AUD) traders are looking ahead to tomorrow’s publication of the Chinese FDI Foreign Direct Investment figures for February, and with any signs of improvement this could prove AUD-positive.

US Dollar (USD) investors, meanwhile, will be looking ahead to the publication of the US industrial production figures for February, which are expected to increase at 0.4% against January’s poor -0.6%.

Tomorrow will also see the release of the US Michigan Consumer Sentiment Index figures for March, which are, however, expected to decrease, potentially weakening the USD/AUD exchange rate.

The Australian Dollar to US Dollar (AUD/USD) exchange rate will likely be driven by geopolitical developments into next week, with any signs of an emerging consensus between the US and China potentially buoying the ‘Aussie’.

David Moore

Contact David Moore