The Australian dollar hits a 3-week high

Michael Steele/Getty Images
  • The Australian dollar finished mixed on Thursday, gaining against the greenback, yen and Canadian dollar but falling back against the Kiwi, pound and euro.
  • More broadly, sentiment was helped by renewed US dollar weakness and signs that China could lower trade barriers for most of its major trading partners in October.
  • The data calendar is quiet on Friday, likely ensuring that sentiment and technicals will continue to drive price movements during the session.

The Australian dollar continued to recover against the greenback on Thursday, boosted by strong gains in stocks and reports that China will lower import tariffs as early as next month.

However, as seen in the scoreboard below as at 7am in Sydney, while the Aussie gained against the US dollar, it fell against most of the major crosses.

AUD/USD 0.7291 , 0.0028 , 0.39%
AUD/JPY 82.02 , 0.48 , 0.59%
AUD/CNH 4.9833 , 0.0082 , 0.16%
AUD/EUR 0.6190 , -0.0032 , -0.51%
AUD/GBP 0.5494 , -0.0031 , -0.56%
AUD/NZD 1.0902 , -0.0073 , -0.67%
AUD/CAD 0.9407 , 0.002 , 0.21%

Having climbed back above the 72 cent level earlier in the week, the AUD/USD continued to rally on Thursday, hitting .7292 late in the US session, the highest level in three weeks.

Strong gains in European and US stocks, along with reports that China is planning to cut average tariff rates on imports from the majority of its trading partners as soon as next month, helped to support investor risk appetite during the second half of the session, seeing traders book profits on recent gains in the greenback.

The weakness in greenback came despite little change in longer-dated treasury yields and continued strength in US economic data, this time from the latest Philadelphia Fed manufacturing survey for September and weekly jobless claims report.

Investing.comAUD/USD Hourly Chart

However, while the AUD/USD continued to recover, extending its gains from the multi-year low of .7083 struck on September 11 to 2.9%, it actually fell against most of the major crosses, especially the New Zealand dollar, euro and UK pound.

The Kiwi was supported by a larger-than-expected increase in GDP growth in the June quarter. The pound was also helped by an upside beat in UK retail sales during August. As for the euro, its gains appear to have been helped by a partial unwind of bearish bets that had been accumulating in recent months as trade tensions between the US and China increased.

In contrast, the Aussie gained against the Japanese yen and Canadian dollar, the former on the back of improved investor sentiment while the loonie was undermined by weakness in crude prices following a tweet from US President Donald Trump.

Turning to the session ahead, there’s once again little on the data docket both at home and abroad, continuing to suggest sentiment and technicals will dictate broader market direction.

Regionally, New Zealand migration data for August will be released at 8.45am AEST. Japan consumer prices inflation in August, along with the latest “flash” manufacturing PMI report for September, will also be released during the session.

Later in the day, other data highlights include flash manufacturing PMI reports from the Germany, France, the eurozone and US, Canadian CPI along with public sector finances from the UK.

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