AUD/USD extends upside above 0.6770 on China-Aussie trade optimism
- AUD/USD has extended its rebound above the critical hurdle of 0.6770 amid optimism on Sino-Australian trade.
- S&P500 futures have displayed a recovery move, shrugging-off the bearish sentiment witnessed in Thursday’s session.
- Investors will get more clarity about the US employment status on the release of the US NFP data
The AUD/USD pair picked strength after a perpendicular fall to near 0.6740 in the late New York session. The Aussie asset has extended its recovery move above the immediate hurdle of 0.6773 amid headlines that China is easing restrictions on imports of Australian commodities.
Meanwhile, S&P500 futures have also displayed a recovery move, shrugging-off bearish sentiment witnessed in Thursday’s session. An improvement in the risk appetite of the market participants is also supporting the Australian Dollar. The US Dollar Index (DXY) has also sensed a gradual selling pressure and has dropped to near 104.75 in early trade. While the 10-year US Treasury yields are unchanged at 3.72%.
The Australian Dollar has sensed demand on expectations that China could ease its trade restrictions on imports of Australian wine, lobsters, and other commodities following earlier reports that Beijing has ended a partial ban on imports of coal from Canberra in a note from Hans Hendrischke, professor of Chinese Business and Management at the University of Sydney, reported by Bloomberg.
After the release of the stronger-than-anticipated United States Automatic Data Processing (ADP) Employment Change data, one thing is for sure the Federal Reserve (Fed) has a genuine reason to maintain higher interest rates for a longer period. A solid job market is going to remain a major concern for the central bank as bumper demand for labor can be offset by offering higher wages, which is sufficient to spurt the overall demand and eventually the Consumer Price Index (CPI).
Going forward, investors will get more clarity on the release of the official US Nonfarm payrolls (NFP) data, which will provide the broad status of employment.