The Australian dollar and Chinese yuan gained ground amid optimism about U.S.-China trade negotiations, with the Aussie reaching $0.7085 amid mixed economic data. A Reuters report highlighted expectations of a potential agreement following a Wall Street Journal analysis of advancing talks.
The Aussie initially climbed 0.57% to $0.7118 before retreating, influenced by soft business inventories and declining job advertisements. Analyst Yukio Ishizuki of Daiwa Securities noted markets had overpriced a downturn in Australia’s economy, suggesting the currency could rise to $0.73-74 if commodity prices remained strong.
The Chinese yuan rose 0.20% to 6.7030 against the dollar in offshore trade, nearing a 7.5-month high. This followed U.S. delays in imposing tariffs on $200 billion in Chinese imports, which supported currency gains. The yuan’s movement coincided with a February 2018 image showing Australian dollars, reflecting ongoing market focus on trade dynamics.
The U.S. dollar weakened against most Asian currencies but stabilized against the yen after President Donald Trump criticized Federal Reserve policies. The greenback traded at 111.96 yen, near a 10-week high, as Trump emphasized his preference for a strong dollar that benefits U.S. trade relations.
Soft U.S. economic data, including the lowest factory activity since November 2016, contributed to cautious sentiment. Analysts anticipated central banks in Europe, Australia, and Canada would adopt dovish or neutral stances, supporting risk-on trades. The euro remained stable at $1.1365 as markets awaited the European Central Bank’s policy decision.
The British pound rose 0.2% to $1.3235 amid reduced Brexit no-deal fears after Prime Minister Theresa May signaled potential delays. This followed earlier gains toward an eight-month high of $1.3351.
