05.11.2019: USD asserts strength amid trade-related optimism (USDX, USD, JPY, AUD)

05.11.2019: USD asserts strength amid trade-related optimism (USDX, USD, JPY, AUD)


Today traders are still estimating the news on the US-china trade talks. Reportedly, the countries were able to reach a consensus on the main issues of the trade agreement during telephone high-level talks on Friday. At the weekend, Donald Trump said that the phase one trade deal would be signed soon. If the parties truly reach the phase one trade agreement, it will revive market sentiment. However, some experts are still skeptical
about the success of the trade talks. Recently Beijing demanded from Washington not just to stop increasing tariffs on Chinese goods but to cancel a tariff hike introduced in September. Meanwhile, trading activity remains low. The US dollar index, which measures the greenback’s strength against a basket of six major currencies, rose by 0.09% to the level of 97.60. The Japanese currency is declining against the US dollar amid trade-related optimism. Versus the yen, the greenback advanced to 108,80. Nevertheless, traders continue to express
concerns over the prospects of the global economy. Today, Markit Economics published a report that showed a contraction in China’s Services PMI. The figure fell to the lowest level since February, a month typically with low trading activity owing to the celebration of the Lunar New Year. The Aussie, which is vulnerable to the news from China, is trading near its highs. The AUD/USD pair reached the level of 0.69 after the announcement of the Reserve Bank of Australia’s decision on its monetary policy. In its statement, the regulator hinted that it would keep its key rate at current levels for a long time as it considered the rate-cutting cycle finished. Of course, the RBA will lower the key rate again if needed. One of the main reasons may be downward external risks. We continue to keep close tabs on market developments. Stay tuned!

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