- Uncertainty surrounding US-China trade talks continues to weigh on antipodeans.
- US Dollar Index rebounds to 98 area on Wednesday.
- FOMC is scheduled to release minutes of its October meeting later.
The AUD/USD pair came under pressure during the Asian trading hours and extended its slide to 0.6800 area in the last hour before finding support and staging a modest rebound. As of writing, the pair was trading at 0.6813, erasing 0.18% on a daily basis.
The uncertainty surrounding the United States (US)-China trade talks as we move closer to the December 15th tariff hike seems to be weighing on the AUD. The US Senate’s approval of the Hong Kong human rights bill is seen as a development that could make it hard for the sides to reach an agreement.
Additionally, US President Donald Trump is reportedly asking for deeper concessions from China in order to cancel the tariff hike and reduce the existing tariff rate, per Reuters.
USD recovers ahead of FOMC minutes
Meanwhile, after moving sideways near the 97.80 mark on Tuesday, the US Dollar Index gained traction and recovered to the 98 area on Wednesday to keep the bearish pressure on the pair intact. Later in the day, the Federal Open Market Committee (FOMC) will be releasing the minutes of its October meeting.
Previewing this event, “it will be interesting to see if the minutes will give us any information on the different stances within the Fed. We believe that the Fed will deliver one more cut in three to six months, as we still believe the US economy is fragile,” said Danske Bank analysts.
Technical levels to watch for
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