Australian Dollar Fluctuates as US-China Trade Talks Confirmed for Late January

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  • Australian Dollar Fluctuates on Trade News – US-China trade talks to continue later this month.
  • Pound Sterling Rises as UK Government Survives No-Confidence Vote – Pressure grows for a second referendum.
  • US Dollar Buoyed by Safe-Haven Demand – Robust US manufacturing fail to extend gains however.
  • Euro Slips as Weak Data Weighs – Eurozone inflation confirmed to have fallen to an eight-month low.

Australian Dollar Volatile Following Latest US-China Trade Developments

The Australian Dollar traded in a wide range on Thursday, initially weakening as US-China trade optimism was cooled by remarks from US Trade Representative Robert Lighthizer regarding a lack of progress in talks. However the ‘Aussie’ bounced back by the end of the session as it was confirmed that Chinese Vice-Premier Liu He will visit Washington at the end of the month for high-level discussions.

The release of Australia’s latest housing data may see AUD fall back again on Friday, should new home sales have slipped in December.

Pound Lifted as Government Survives Vote

The Pound edged higher at the start of the Asian session yesterday, finding some modest support as Theresa May’s government narrowly survived a no-confidence vote. Further upward momentum in GBP came as speculation of a second referendum grew following comments from opposition leader Jeremy Corbyn that he may support a ‘peoples vote’.

While Brexit is likely to remain the main catalyst for Sterling today, the release of the UK’s latest retail sales figures may also have an impact on the Pound, with an expected contraction in sales growth potentially dragging on GBP.

Euro Struggles on Weak Data

The Euro was left on the defensive during Thursday’s European session as a recent run of weak Eurozone data weighed on the single currency. This was not helped by the release of the bloc’s latest CPI figures as they confirmed that inflation fell to an eight-month low in December.

In the absence of any notable data the Euro may struggle to find momentum on Friday, leaving EUR to languish as its recent lows.

US Dollar Buoyed by Safe-Haven Demand

The US Dollar enjoyed modest gains on Thursday, buoyed by deteriorating risk appetite. However the ‘Greenback’ struggled to build on this momentum during the US session, despite the release of a stronger-than-expected Philadelphia Fed manufacturing index.

The publication of the latest US Consumer Confidence figures may exert some pressure on the US Dollar overnight however, with many analysts forecasting that the ongoing government shutdown will have dragged on sentiment this month.

Canadian Dollar Stalls as Oil Prices Slide

The Canadian Dollar continued to be driven by movement in oil markets yesterday, with a 1% drop in Brent crude limiting the appeal of the oil-sensitive ‘Loonie’.

The release of Canada’s latest CPI figures is likely to drive CAD at the end of the week however, with a dip in inflation potentially softening the Canadian Dollar.

New Zealand Dollar Slumps on Weak Risk Appetite

The New Zealand Dollar was met by broad losses on Thursday, with a slight downturn in risk appetite and weaker commodity prices limiting the appeal of the ‘Kiwi’.

This downtrend in NZD may persist through today’s session as well if the domestic Business PMI indicates that growth in New Zealand’s manufacturing sector slowed once again.

Data Released

January 18th 08:30 NZD     Business PMI (DEC)      52.2
January 18th 11:30 AUD     New Home Sales (DEC) 3.6%
January 18th 20:30 GBP     Retail Sales (DEC)         -0.8%
January 19th 00:30 CAD     Inflation Rate (DEC)       1.7%
January 19th 02:00 USD     Consumer Sentiment (JAN)        97

Post by TorFX

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