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MTrading Team • 2023-07-20

AUDUSD buyers cheer strong Australia data, softer USD and China news

AUDUSD buyers cheer strong Australia data, softer USD and China news

AUDUSD leads the gainers versus the US Dollar as it benefits from upbeat Australian employment data, as well as the US Dollar’s retreat. Also supporting the Aussie pair could be China’s efforts to lure more global investments into the dragon nation. However, fears about the US-China tension and the market’s cautious mood prod the pair buyers and market players during early Thursday.

Elsewhere, US Treasury bond yields remain pressured as mostly downbeat US data joins concerns about Fed’s inability to lift the rates after July, which in turn weigh on the US Dollar and allow the commodities, as well as Antipodeans, to remain firmer amid inactive markets.

Further, the German Producer Price Index came in firmer while trade numbers from Switzerland also marked welcome prints, which in turn favored the EURUSD and USDCHF to move against the greenback with more conviction. However, the USDJPY fails to benefit from the US Dollar’s weakness as the Tokyo government cuts economic forecasts for the nation whereas Japan PM Kishida favors BoJ’s dovish policy.

Moving on, gold renews a two-month high whereas WTI prints mild gains while reversing the previous day’s retreat from the weekly top.

Talking about the cryptos, BTCUSD remains firmer for the second consecutive day while ETHUSD prints the first daily gains, so far, in seven as more Bitcoin ETFs join Federal Register for approval.

Following are the latest moves of the key assets:

  • Brent oil reverses the previous day’s pullback from weekly top, mildly bid near $79.30 at the latest.
  • Gold price seesaws at the highest level in two months, making rounds to $1,980 by the press time.
  • USD Index struggles to extend the previous two-day recovery around 100.25-30, printing minor losses as we write.
  • Wall Street benchmarks closed with minor gains and refreshed yearly tops but stocks in the Asia-Pacific zone edged lower. Even so, equities in Europe and UK trade mixed of late.
  • BTCUSD and ETHUSD print minor gains around $30,200 and $1,900 as we write.
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Mixed sentiment weighs on USD, fuels Aussie Dollar

The recently downbeat US statistics and receding inflation fears allow the Fed hawks to take a breather, which in turn weighs on the US Dollar. Even so, the widely anticipated July rate hike and concerns that the US central bank will keep the rates higher for longer put a floor under the greenback. Additionally, China’s efforts to attract more appear to lack more credence as the US-China tussles jump back to the table.

Australia’s strong job numbers pushed traders to recollect the hawkish RBA Minutes and renew concerns that the Aussie central bank could restart lifting rates. The same contrasts with the mostly dovish concerns about the Fed to propel the AUDUSD price.

Furthermore, commodities, antipodeans and cryptos edge higher even if stocks in the Asia-Pacific zone trade mixed.

  • Strong buy: USDCAD
  • Strong sell: ETHUSD, GBPUSD, Gold
  • Buy: USD Index, Nasdaq, USDJPY

Not much to watch…

Having witnessed a good start to the day, the markets are likely to witness a dull Thursday as there aren’t any major data/events scheduled for publication. Even so, US jobless, housing and EU sentiment figures may entertain the momentum traders. In all, the US dollar’s retreats may survive for the day and can favor the riskier assets, especially the AUDUSD.

May the trading luck be with you!