Originally published by AxiTrader
It seems like, at the moment, is all we need is a day or two of good news for rumors or innuendo about the US Administration's plans for trade battles are renewed and the battle rejoined.
So it is this morning that after I wrote that President Trump had eased back on China and Russia/Syria this week and there was news last night he’s even reconsidering the TPP that we've seen a Wall Street Journal article hit the wires saying, "the Trump White House, confident that its hard-line strategy is succeeding, is planning to ratchet up the pressure on China by focusing on new tariffs and threatening to block Chinese technology investment in the US, according to officials familiar with the strategy".
No wonder Chinese State Media and the Commerce Department have continued their bellicose path even after President Xi's less aggressive tone.
That's the background against which the Australian dollar sits this morning - largely unchanged day on day for the past 3 trading days.
At 0.7757 it is unfazed by the latest news even though S&P 500 futures are down 11 points as I write.
So where are we?
The Australian dollar has been calm over the past day as the competing forces of a stronger US dollar appear to be more than balanced by the coincident increase in risk sentiment that has resulted from this week’s apparent de-escalation of trade tensions and associated lift in stocks and bond rates.
So we are here again in the mid-77 cent region which has been so much of an attraction point over recent years. If things do actually settle down on trade and Syria that would be a very positive sign for the Aussie dollar as it would take away a big negative in terms of worries about sentiment and growth.
But the reality is that save for the US a big part of the global growth pulse – at least in terms of surprise data – seems to have passed. So again we get a countervailing force. And then there’s the US dollar as it tries to rise off the mat. It all conspires to a range.
On the day if copper prices stay weak my sense is the Aussie could drift a little lower., perhaps 0.7720, maybe 0.7700.
But overall we are simply ratcheting within a 0.7640/0.7820 range.
Have a great day's trading.