AUD/USD: Aussie to Benefit from US-China Trade Deal

The risk sensitive Australian dollar edged up slightly against the greenback on Thursday, driven by improved sentiment around the US — China trade deal and hopes that global growth will pick up in 2020. On the foreign exchange market, the AUD/USD exchange rate was seen quoted within a trading range of 0.6921 and 0.6930.

The market liquidity has only moderately returned back as the festive season will continue to keep away the smart money flow. The liquidity conditions will return back to normal after the New Year and until then currency traders should embrace fewer swings in the foreign exchange rates.

The activity on the global currency market has remained mostly subdued as most financial centers are still closed on Thursday for the Boxing Day.

In other news, the Chinese officials stated on Wednesday they are in close touch with the Trump administration to schedule a signing ceremony of the interim trade agreement. The trade deal between the world’s two most powerful economies in the world is expected to shore up risk assets.

Elsewhere, the Gold post-Christmas gains continued to extend above the big psychological number $1,500 an ounce. The precious metal was seen trading between a low of $1,497 and a high of $1,505.50 during the London trading hours. This was the highest level in almost 8 weeks.

Persisting concerns over weak global growth and weak US data before Christmas boosted the XAU safe haven bids.

The dollar index, which gauges the greenback’s strength against a basket of major currencies continues to trade unchanged and was seen quoted at 97.71 during London trading hours.

The domestic benchmark equity index S&P/ASX 200 index settled on Thursday at 6794.2 registering a modest 0.13% gain. Year-to-date the Australian stock market has gained double digit returns of 20.33%.