By falling bond yields, the United States dollar clipped. Nevertheless, with lockdown easing, Australian dollar gains to a one-week high. Before the United States jobs data, investors cling to trade.
On Friday, the dollar struggled, and currencies linked to global trade rose. It was boosted by news that China and the United States negotiators agreed to strengthen cooperation. The cooperation was concerning a trade deal. Moreover, more governments are slowly reopening their economies.
Traders looked ready to ignore upcoming United States employment data. Thus, the appetite of investors for risk was healthy. Nevertheless, the unemployment data will most probably show the American economy losings more hobs than at any time since the Great Depression.
On Friday, top Chinese and the United States representatives discussed their Phase 1 trade deal. China said that it agreed to improve the atmosphere for implementation. The United States said there are expectations from both sides to meet its obligations.
Amid escalating tension between the countries, the discussion in a telephone call came. It exacerbated by the United States’ criticism of China’s handling of the outbreak of novel coronavirus.
The Australian dollar closely correlates with sentiment towards the global economy and China. Thus, after earlier hitting a one-week high, it rose 0.3% to $0.6514.
Currencies of the emerging market climbed. Per dollar, China’s offshore yuan rose 0.1% to 7.087.
The government of Australia announced that it would ease social distancing restrictions. Those restrictions were implemented for slowing the spread of the coronavirus in a three-step process. It aimed by July to remove all curbs. Thus, that situation boosted the dollar in Australia.
Nevertheless, some analysts are nervous about Australia’s dollar.
Thu Lan Nguyen is a Commerzbank analyst. She said that it remains unclear how deep the collapse of the economy in Australia will be and when there will be a recovery.
Nguyen said that the uncertainty remains high, and the Australian dollar is vulnerable.
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