AUD/USD Exchange Rate Steady, US-China Trade Developments in Focus
The Australian Dollar US Dollar (AUD/USD) exchange rate held steady today, with the pairing currently trading around $0.677 after the Reserve Bank of Australia (RBA) Governor, Philip Lowe, said that Australia’s economy was already benefiting from the bank’s low-interest rates.
Mr Lowe said:
‘The Board is also committed to maintaining interest rates at low levels until it is confident that inflation is sustainably within the 2 to 3 per cent target range… This pick-up in growth should see a reduction in the unemployment rate and a lift in inflation. So we are expecting things to be moving in the right direction, although only gradually.’
However, ‘Aussie’ investors have remained cautious as Mr Lowe failed to rule out any further rate cuts from the RBA. This has clipped market confidence in the ‘Aussie’ as its economic health continues to teeter in an uncertain balance.
US-China trade developments have propped up the AUD/USD exchange rate today, with rising hopes that the world’s two largest economies could be near to securing a ‘phase one’ trade deal in the near-term.
China’s Ministry of Commerce said in its online statement:
‘Both sides discussed resolving core issues of common concern, reached consensus on how to resolve related problems [and] agreed to stay in contact over remaining issues for a phase one agreement.’
USD Safe-Haven Appeal Sinks on US-China Trade Deal Hopes
The US Dollar (USD) failed to gain on the Australian Dollar (AUD) as optimism over an imminent US-China trade deal continues to weigh on demand for the safe-haven ‘Greenback’.
China’s Ministry of Commerce said in its statement:
‘Both sides discussed resolving core issues of common concern, reached consensus on how to resolve related problems [and] agreed to stay in contact over remaining issues for a phase one agreement.’
With tensions settling down in Hong Kong after district elections saw a pro-democracy candidate secure a landslide victory, market appeal for the USD has also slipped.
In US economic news, today will see the release of October’s US new home sales, which are expected to improve slightly from 0.701 million to 0.709 million.
Following Federal Reserve Chairman Jerome Powell’s comment that the US economy’s glass is ‘more than half full’, we could see the US Dollar rise following day’s housing figures as market optimism in the world’s largest economy improves.
AUD/USD Outlook: Could the US Dollar Rise on Improving Third-Quarter Growth?
US Dollar (USD) investors will be looking ahead to tomorrow’s release of the US flash growth figure for the third quarter, which is expected to improve from 1.6% to 1.7% and further buoy optimism in the American economy.
Tomorrow will also see the publication of the US goods orders figure for October, which is expected to ease to -0.3%.
US-China trade developments, however, will continue to drive the AUD/USD exchange rate, with any signs of a breakthrough trade deal between the two superpowers boosting the risk-averse ‘Aussie’.