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Currency Market Analysis

Oct 11, 2019 | Currency Market Analysis

Global Themes

Aussie jumps to two-week highs on China, Brexit deal hopes

The AUD jumped higher overnight as improved sentiment towards the two big political problems of recent times – Brexit and the US-China trade war – boosted optimism.

In the US, more positive reports from US-China talks helped global sharemarkets rise, with particular focus on the potential for a currency pact between the two nations.

Any FX pact might see the USD weaken and the Chinese yuan gain.

The AUDUSD gained 0.5% as it neared two-week highs.

Brexit bounce for pound

In the UK, a strong positive appraisal of UK and Irish talks added to the improved global sentiment.

The UK and Irish border has been a major sticking point in Brexit talks.

The GBP jumped on the news with the AUDGBP falling 1.5% to near five-month lows.

The AUD was higher in most other markets.

Talks in focus

Tonight’s focus remains on key US and China talks.

A more positive result to these talks – the thirteenth round of official discussions since the first tariffs were announced in early 2018 – could see further gains in the AUD.

By Steven Dooley, Currency Strategist APAC

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