The Australian dollar was flat against the US dollar on Thursday with both currencies benefiting in different ways from China cutting tariffs on $75bn worth of US goods. A pickup in risk sentiment from the easing trade tensions has boosted the Aussie while US exporters will benefit from lower trade barriers with China.
AUD/USD was lower by 6 pips (-0.10%) to 0.6739 with a daily price range of 0.674 to 0.6765 as of 3pm GMT. The currency pair was choppy moving above and below its opening price all day. The narrow losses detract from weekly gains, currently at +0.69%.
AUD/USD – A bigger than expected fall in weekly jobless claims helped bolster the dollar
Initial jobless claims fell to 202,000 from 217,000 previously when expectations were for a smaller drop to 215,000. The data is the final piece of the puzzle for those trying to forecast the official US unemployment numbers released by the Bureau of Labour Statistic (BLS) tomorrow.
China halving tariffs on $75bn worth of US goods exported to China was always expected as part of the phase one trade deal but is nonetheless good news for the United States as well as the broader Asian economy.
News that Donald Trump had been acquitted in his impeachment trial in the US Senate bore little impact on forex markets since it had already been widely expected that Senators would vote along party lines. That said, analysts have been suggesting the political stability inherent in knowing the incumbent will fight the 2020 election should be a source of strength for US markets.
Although down against the Aussie, the US dollar index, a measurement of the dollar against a basket of currencies has been rising this week thanks to some strong economic data releases.
The Aussie
Reports of a vaccine being developed for the coronavirus helped risk sentiment improve on Thursday, although gains were tempered by the WHO cautioning there is no proven cure yet. In terms of the effect of the coronavirus on Australia, Prime Minister Scott Morrison said the impact of the outbreak on Australia’s economy is likely to be ‘significant’.
