Australian Dollar Advances On Risk Appetite

The Australian dollar strengthened against its most major counterparts in the European session on Monday, as sentiment lifted up on trade optimism after Chinese Vice-Premier Liu He signaled substantial progress towards a partial trade deal between the U.S. and China.

Over the weekend, Liu He said that the two sides have built a strong foundation for signing of a phased agreement and that Beijing will continue to work with Washington on basis of ‘equality and mutual respect’.

U.S. President Donald Trump said he expects to sign a “Phase 1” agreement with China at a summit next month in Chile.

Both sides had agreed to hold off imposition of new tariffs temporarily as a deal is under discussion.

Sentiment boosted after Chinese bourses revised rules to allow mainland investors to buy Hong Kong-listed dual-class shares for the first time.

No major economic reports are scheduled today.

The currency has been trading higher against its major counterparts in the Asian session, excepting the kiwi.

The aussie advanced to 0.6880 against the greenback, its highest since September 16. The next possible resistance for the aussie is seen around the 0.70 mark.

The aussie firmed to a 2-1/2-month high of 74.73 against the yen, up from Friday’s closing value of 74.32. The aussie is likely to challenge resistance around the 76.00 mark.

Figures from the Ministry of Economy, Trade and Industry showed that Japan’s all industry activity remained unchanged in August.

The all industry activity index remained unchanged month-on-month in August, after a 0.2 percent rise in July. Economists had forecast a modest 0.1 percent fall.

The Australian currency that closed last week’s deals at 1.6287 against the euro climbed to a weekly high of 1.6226. The aussie may face resistance around the 1.60 level, if it rises again.

The aussie appreciated to a 10-day high of 0.9021 against the loonie from last week’s closing value of 0.8999. The aussie is seen finding resistance around the 0.92 level.

On the flip side, the aussie pulled back to 1.0722 against the kiwi, from a high of 1.0744 hit at 4:00 am ET. If the aussie falls further, 1.06 is seen as its next support level.

The material has been provided by InstaForex Company – www.instaforex.com