The Australian Dollar has surged nearly 1% on Monday’s open, touching highs of 0.7380. This follows the temporary truce regarding the US-China trade war which was agreed by US president Trump and Chinese President Xi at the G20 in Argentina. The agreement sees the US placing a temporary hold on previously proposed tariffs on China whilst officials engage in a 90-day negotiation period. Risk sensitive currencies such as the AUD and NZD have surged this morning as markets begin absorbing the news.
In what is shaping up to be a massive week for the Aussie in terms of data releases, we start the week with third quarter company profits and inventories as well as October dwelling approvals; both due out at 11:30 EST. The market expectation is for a 2.8% rise in company profits and a 0.4% rise in inventories however both reads are unlikely to be market movers. We also have AiG Pmi and ANZ job ads numbers which are followed by the Melbourne institute inflation gauge. Looking a bit further ahead we have Q3 net exports, current account numbers and the RBA monetary policy decision for December due out on Tuesday, closely followed by Wednesdays Q3 GDP read and Thursdays October retails sales numbers. Thursday also sees trade balance numbers and further central bank commentary from governor Debelle to close out the week.
The Aussie has broken through key technical resistance levels during this mornings trade with traders eager to see if the domestic unit can test key psychological resistance around the 0.74 handle. On the downside, first lines of support seem to be at 0.7345 heading into this week. Given the raft of domestic releases due out of the domestic economy this week, it could be a wild ride for the aussie over the coming days which will likely guide the currencies direction for the remainder of the year.