- AUD/USD shrugged off negative China trade news on Friday to hit fresh monthly highs.
- Excellent Australian containment of the Covid-19 pandemic is likely supporting the currency alongside NZD.
AUD/USD looks set to end the week on the front foot and at its highest levels since early September of just below 0.7400. On the day, the pair is up 30 pips or 0.4%.
AUD shrugs of China trade woes
Friday’s Asia session saw a few negative updates regarding Australian and Chinese trade relations. Firstly, China is reportedly set to hit Australian wine with tariffs that could double, or even triple its price for Chinese consumers, making the category of product “unviable” for Australian exporters, according to Australian Trade Minister Simon Birmingham.
The Chinese Ministry of Commerce said that its investigation started back in August, had found that Australia was “dumping” wine in China and had delt substantial damage to domestic Chinese producers of wine. Australia has of course criticised the decision.
Friday’s new tariffs on wine are the latest in a list of Chinese trade actions being taken against Australia, which many see as China’s way of “bullying” Australia into backing down from its call to have an independent investigation into the origins of Covid-19.
Despite the fact that China makes up fully 37% of all Australian wine exports, worth more than $800M per year, AUD has been completely unfazed. Instead, the currency opted to track a weakening USD by hitting fresh monthly highs just under 0.7400.
Supporting AUD, and seemingly outweighing the above mentioned negative China trade relations news, has been further evidence of excellent containment of the pandemic in Australia. Indeed, this week Victoria was declared virus-free after having no new cases reported for 28 days.
Given how well Australia and New Zealand have contained the pandemic, perhaps it is not surprising to see AUD and NZD as by far the best two performing currencies on the month.
AUD/USD key levels
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended content
Editors’ Picks
EUR/USD holds on to intraday gains after upbeat US data
EUR/USD remains in positive ground on Friday, as profit-taking hit the US Dollar ahead of the weekend. Still, Powell's hawkish shift and upbeat United States data keeps the Greenback on the bullish path.
GBP/USD pressured near weekly lows
GBP/USD failed to retain UK data-inspired gains and trades near its weekly low of 1.2629 heading into the weekend. The US Dollar resumes its advance after correcting extreme overbought conditions against major rivals.
Gold stabilizes after bouncing off 100-day moving average
Gold trades little changed on Friday, holding steady in the $2,560s after making a slight recovery from the two-month lows reached on the previous day. A stronger US Dollar continues to put pressure on Gold since it is mainly priced and traded in the US currency.
Bitcoin to 100k or pullback to 78k?
Bitcoin and Ethereum showed a modest recovery on Friday following Thursday's downturn, yet momentum indicators suggest continuing the decline as signs of bull exhaustion emerge. Ripple is approaching a key resistance level, with a potential rejection likely leading to a decline ahead.
Week ahead: Preliminary November PMIs to catch the market’s attention
With the dust from the US elections slowly settling down, the week is about to reach its end and we have a look at what next week’s calendar has in store for the markets. On the monetary front, a number of policymakers from various central banks are scheduled to speak.
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.