- Trade tensions ease after China calls for 'calm' resolution.
- US Dollar Index rebounds to 98 following Friday's sharp drop.
- Coming up: Chicago Fed's National Activity Index and July Durable Goods Orders from US.
Despite the increasing volatility surrounding major currencies and sharp changes in the risk sentiment on Friday, the AUD/USD pair stayed in its weekly range as the broad USD weakness countered the selling pressure the AUD was facing as an antipodean amid a sudden escalation in trade tensions. After closing the week flat, however, the pair opened with a bearish gap and touched its lowest level since August 7 at 0.6689.
Following the slide during the Asian session, the pair gained traction as the AUD capitalized on the recovering market sentiment. As of writing, the pair was trading at 0.6766, adding 0.2% on a daily basis.
Sides take a step back in trade war
Earlier today, Reuters reported that Vice Premier Liu He, who has been leading the Chinese side in trade negotiations, said that China was willing to resolve the trade dispute with the US through "calm" negotiations and added that they were against further escalation of the conflict.
Commenting on these remarks, "Great respect for the fact that President Xi & his Representatives want “calm resolution.” So impressed that they are willing to come out & state the facts so accurately," President Trump tweeted out.
"This is why he is a great leader & representing a great country. Talks are continuing!"
On the other hand, the 10-year US Treasury bond yield made a sharp U-turn and erased its daily losses on improved market sentiment and allowed the US Dollar Index (DXY) to retrace last Friday's drop. At the moment, the DXY is up 0.7% on the day, making it difficult for the pair to continue to push higher. Later in the day, durable goods orders figures from the US and the Chicago Fed's National Activity Index will be looked upon for fresh catalysts.
Technical levels to watch for
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays below 1.0550 after mixed US data
EUR/USD stays under modest bearish pressure and trades below 1.0550 in the American session. Although the US Dollar struggles to gather strength following mixed macroeconomic data releases, the risk-averse market environment doesn't allow the pair to gain traction.
GBP/USD recovers modestly, trades near 1.2650
GBP/USD stabilizes near 1.2650 after falling toward 1.2600 earlier in the day. Nevertheless, the pair struggles to gather bullish momentum as the deepening Russia-Ukraine conflict causes investors to stay away from risk-sensitive assets.
Gold extends gains beyond $2,660 amid rising geopolitical risks
Gold extends its bullish momentum further above $2,660 on Thursday. XAU/USD rises for the fourth straight day, sponsored by geopolitical risks stemming from the worsening Russia-Ukraine war. Markets await comments from Fed policymakers.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
A new horizon: The economic outlook in a new leadership and policy era
The economic aftershocks of the COVID pandemic, which have dominated the economic landscape over the past few years, are steadily dissipating. These pandemic-induced economic effects are set to be largely supplanted by economic policy changes that are on the horizon in the United States.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.