The Australian dollar is finishing a slow trading week on a positive note as it touched a new 5-month high against the greenback. On the foreign exchange market, the AUD/USD exchange rate on Thursday settled at 0.6945, registering a 0.32% gain.
The Australian dollar is on the verge to post its best quarter against the US dollar since Q3 of 2017. The Aussie was well supported on the interbank market since the beginning of December tracking its seasonal pattern.
The easing trade tensions between the world’s two most powerful economies coupled with optimism around Chinese economy have benefited the AUD pairs. The liquidity is slowly starting to return to the market after trading was subdued on Christmas holiday. However, normal trading conditions are only expected to return back to the market after the New Year.
In other news, analysts at leading global investment bank Goldman Sachs see the US dollar softening in 2020. Goldman only sees a “mild depreciation” of about 1.5% – 2.0% in 2020, which can help the Aussie bullish sentiment.
“Despite improving investor risk appetite we see only modest downside for the U.S. Dollar in 2020 because the American economy still looks much sturdier than China or Europe. However, FX markets should be anything but dull, with plenty of opportunity to collect carry, and to position for macroeconomic divergence and major political events,” said Zach Pandl, currency strategist at Goldman Sachs.
During the London trading hours Aussie was seen quoted higher and trading within a range of 0.6941 and 0.6976.
Elsewhere, the precious metal Gold inched higher for the third consecutive day, touching a 7-week high. The case for a stronger Gold price was motivated by its seasonal pattern and a combination of disappointing US data and lower interest rates in the US. Gold price settled at $1,511 an ounce on Thursday, registering a 0.73% gain and was seen almost unchanged at around $1,509 ahead of the New York trading session.
The dollar index, which gauges the greenback’s strength against a basket of major currencies slipped lower and was seen quoted as low as 97.17 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%.