Summary:
The Australian dollar rose after US-China weekend talks announced a trade deal. Though details are unclear, any easing may boost sentiment.
The australian dollar gained after weekend talks between the US and China announced a "trade deal". While details of the deal are still unclear, any de-escalation in the ongoing trade war could bring relief.
Trump indicated Friday ahead of key trade talks that he was willing to lower tariffs on China to 80%, but that level may still be higher than what investors and business leaders were hoping for.
A priority on US agenda is securing the removal of China's export restrictions on rare earths used to make magnets as a range of industries face disruption, people familiar with the preparations for the talks said.
According to Bloomberg Economics calculations, the existing tariffs on China and the rest of the world have lifted the US's average tariff rate by more than 20 percentage points to 23%.
A fragile ceasefire was holding between India and Pakistan on Sunday, after hours of overnight fighting between the nuclear-armed neighbours, as Trump said he will work to provide a solution regarding Kashmir.
Meanwhile Ukrainian President Zelenskiy said he was ready to meet Russian leader Putin in Turkey on Thursday for direct talks, the first since early months of the 2022 invasion.
The Aussie dollar has fallen below 200 SMA and reverted to its previous trading range As such the risk is skewed towards the downside in the near term with support around 0.6350.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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