AUD / USD continues to rise towards 0.7600

  • AUD / USD has been trading broadly stronger on Wednesday, the currency pair soaring amid softer dollar conditions and favorable risk appetite.
  • The AUD could also have gotten a respite from the news that China will cut import tariffs on a variety of imported goods.

It has been a positive day for him AUD/USD, the pair benefits from soft US dollar conditions amid a relatively risk-friendly market environment. The main focus today was Brexit; Just before the start of the US session, news began to emerge that the UK and the EU are on the verge of an agreement and the announcement that an agreement has been reached in principle could still be finalized this Wednesday; The news sent GBP to the top of the G10 FX performance chart and USD to the bottom. The next best performers after the British pound have been the AUD and the NZD.

Therefore, AUD / USD has been in the lead for most of the session, although the pair has failed to test the 0.7600 level, hitting highs just above 0.7590. As Wednesday’s currency close approaches, the pair is up 60 pips or roughly 0.8%.

China will reduce import tariffs …

Some positive news on China and trade protectionism could also be giving rates like the AUD and NZD a boost on Wednesday; China’s Finance Ministry announced on Wednesday that it would lower tariffs on more products expected to be in high demand in 2021, including medical equipment, high-tech equipment and some commodities. Products will be taxed at temporary rates that are more favorable than the usual most-favored-nation rate.

It is understood that some Australian exports will be included in the list of tariff cuts, China does not appear to be specifically aiming to do Australians any favors. Rather, the Finance Ministry said that the tariff changes were made to meet domestic demand and boost the technological development of Chinese industries.

In fact, diplomatic relations between the two trading partners remain bitter. Although the news appears to have contributed to a stronger AUD on Wednesday, most analysts would agree that it in no way heralds better days for Aussie-China relations.

.

You may also like