- AUD/USD cheers US-China trade optimism, USD retreat.
- Recovery in the Treasury yields puts a lid on the upside.
- Markets eye Australian-Sino woes and US macro data.
The upside attempts in AUD/USD remain capped below 0.7200 so far this Thursday while the buyers continue to find support around 0.7165 region, leaving the spot wavering in familiar ranges.
At the press time, the aussie drops 0.11% to trade at 0.7171, over 100-pips down from multi-month highs reached at 0.7276 a day before.
Despite the renewed optimism on the US-China trade front and broad-based US dollar retreat, the spot failed to sustain at higher levels. China’s Commerce Ministry confirmed that it plans to hold trade talks with the US in the coming days.
The market mood got a lift on China’s announcement, with the Treasury yields paring back losses while the safe-haven US dollar reversed a part of Wednesday’s rebound. The recovery in the US Treasury yields dulls the attractiveness of the aussie as an alternative higher-yielding asset.
Further, markets also weigh in the fresh tensions between Australia and China after the OZ government said that it plans to block China Mengniu Dairy Co Ltd’s purchase of some of the country’s best-known dairy products.
Meanwhile, the FOMC minutes underscored concerns about the dwindling US economic recovery, which is unlikely to go down well with the global equity markets, keeping the bounce limited in the risk asset, the aussie dollar.
Attention now turns towards the US Jobless Claims and Philly Fed Manufacturing Survey for fresh trading impetus.
AUD/USD Technical levels
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