Australian dollar rises
Yesterday, the local currency started the week on a firm footing, helped by improved risk sentiment across Asian markets on hopes the United States and China will soon resolve their trade war.
Supporting broader sentiment in the region on Monday were comments by US President Donald Trump that he would delay a planned tariff increase on Chinese imports and that he was looking forward to a meeting with Xi Jinping once a deal is hammered out.
The Australian dollar, a liquid proxy for Chinese growth, added 0.3 per cent to 71.46 US cents, drifting away from a 10-day trough of 70.70 US hit last week on reports a Chinese port has banned Australian coal imports.
The scare abated as several officials from China and Australia separately came out to deny the report, saying there were delays as Chinese customs authorities had stepped up safety checks on foreign cargoes.
Also helping the Aussie, prices of Australia’s biggest export earners – iron ore and coal – rose, while copper, a barometer of global growth, jumped to a seven-month top.
The gains came as market focus shifted squarely to US-Sino trade talks with Trump tweeting progress had been made on intellectual property, technology transfers, agriculture, services and currencies.
“Even as we wait for details of the agreement, the anxiety is likely to ease and encourage bullish risk exposure in general,” Citi analysts said in a note.
The trade war has been a psychological obstacle for financial market sentiment since last year, weighing on risk assets and fueling fears of a global economic slowdown.
Australian government bond futures were mixed, with the three-year bond contract easing one tick to 98.35.
The 10-year contract added 2.5 ticks to 97.93.