AUD buoyed as trade talks drive uptick in risk appetite

Daily Currency Update

AUD - Australian DollarThe Australian dollar creeped upward through trade on Thursday pushing back through 0.6750 as demand for risk improved on the back of upbeat US-China trade discussions. The vibe is positive according to key trade officials as talks progress and optimism surrounding at least a partial trade deal and medium-term tariff détente increases. The AUD followed the Yuan higher touching intraday highs at 0.6775 before stops and profit taking forced a marginal correction and we open this morning buying 0.6762 US cents. The question now is can we sustain this risk on move and what can we expect from day 2 of trade talks. While the initial signs promote ongoing optimism a break down in negotiations will force the AUD back toward 0.6680 while the upside gains enjoyed should a mini/partial deal be agreed are limited to key resistance handles. Since slipping below 0.68 in mid-September the AUD has struggled to break back above 0.6775/80 while previous supports at 0.68 and 0.6830 now pose tricky barriers of resistance. With little of on the domestic docket attentions and focus will remain squarely affixed to trade negotiations as the primary driver governing direction into the weekly close.