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Currency Market Analysis

Dec 13, 2019 | Currency Market Analysis

Global Themes

Aussie at four-month highs as trade deal, UK vote boosts


• Aussie at four-month highs
• UK Conservatives look to win
• US-China deal to drive markets

Aussie jumps on trade deal reports

The Australian dollar charged to four-month highs this morning after the US and China were reported to have struck a trade deal.

The news around trade had become increasingly optimistic over the last 24 hours with the US President Donald trump saying a “big deal” was “very close”.

Media reports from Bloomberg and CNBC this morning suggested the deal has been agreed to and President Trump has now signed the agreement.

The market is likely to see further volatility as markets adjust to ongoing developments.

Johnson wins

In other markets, the UK elections results drove activity, with early exit polls signalling a strong win for the Conservative Party.

Boris Johnson’s governing party was forecast to have around 50 seats as majority.

The pound gained and the AUDGBP fell.

Sell the fact?

The ongoing developments of the US-China trade deal will drive short-term momentum.

The risk remains that after already gaining strongly over the last two months – the US’s Dow Jones index is up almost 10% -- the market might “buy the rumour and sell the fact”.

This could see the Aussie’s gains capped today.


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