AUD/USD Turns Bullish as Markets Await US-China Phase One Trade Deal

AUD/USD is trading close to four-and-a-half month highs over rising optimism in markets about the signing of the phase one trade deal

Arslan Butt•Tuesday, December 24, 2019•1 min read

AUD/USD Turns Bullish as Markets Await US-China Phase One Trade Deal

Early on Tuesday, the Australian dollar is trading close to four-and-a-half month highs against the US dollar over rising optimism in markets about the signing of the phase one trade deal between the US and China. At the time of writing, AUD/USD is trading around 0.691.

Risk currencies such as the AUD and the NZD have benefited significantly ever since the US and China announced the finalizing of their partial trade deal, helping lift the mood in the markets. AUD/USD has been especially bullish as Australia is one of China’s key trading partners and has suffered from the fallout effect of the prolonged trade war.

Any improvement in trade tensions should help boost economic growth in Australia, helping the AUD turn bullish. The AUD has also strengthened following China’s decision to cut tariffs on a variety of imports starting 2020, in a bid to boost its economic growth via spurring consumer spending.

Australia’s economy is closely linked with that of China, and any improvement in China’s GDP has a positive correlation with it. However, the primary driver of bullishness in AUD/USD remains the announcing of the phase one trade deal and expectations that it will improve economic growth globally.

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ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.