- AUD/JPY dips on US-China trade tensions.
- A deal on farm products looms as next contentious issue.
AUD/JPY slipped below support at 75.29 earlier today and hit a low of 75.18, as the Japanese Yen picked up a bid, possibly on reports that the US and China are yet to reach a consensus on Chinese imports of US farm goods.
A deal on agricultural products seems to have emerged as a contentious issue ahead of the new round of trade talks between the two nations.
President Trump emerged from a June meeting with his Chinese counterpart Xi, saying that China would immediately increase purchases of American farm products in return for a trade truce.
China, however, did not make any explicit commitment and has called for resolution of the issue based on a foundation of equality and mutual respect. With the issue of farm products casting doubt over the upcoming face-to-face negotiations, the AUD/JPY pair, a global risk barometer, has come under pressure.
Moreover, both the AUD and JPY have picked up a bid against the US Dollar in response to a dovish testimony by the US Federal Reserve President Jerome Powell.
Trade concerns, however, are likely helping the JPY outperform the AUD. As of writing, the AUD/JPY pair is trading at 75.27,representing a 0.32% drop on the day.
Australian data released earlier today did little to strengthen the bid tone around the AUD. Australia’s Consumer Inflation Expectations (Jul) came in at 3.2% vs 3.3% in June.
Home Loans (May) growth stalled, missing the expected print of -0.6%, having dropped 0.9% in the preceding month.
Pivot levels
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