Risk Currencies Rally as US-China Trade Tensions Ease
Risk-sensitive currencies posted strong gains against safe havens as reports of US-China trade détente improved global market sentiment. AUD/USD jumped 0.45% to 0.6585, while NZD/USD climbed 0.4% to 0.6015, both benefiting from improved China growth prospects. EUR/USD advanced 0.3% to 1.1615 as reduced trade uncertainty supported European exporters. Conversely, USD/JPY retreated 0.2% from 151.00 highs as yen shorts covered positions amid reduced risk appetite for dollar longs. The potential trade agreement could remove tariff threats that have weighed on global growth forecasts. Commodity currencies particularly benefit given their exposure to Chinese demand. Technical levels show AUD/USD targeting 0.6650 resistance, while NZD/USD eyes 0.6050. Continued progress in trade talks could extend the risk-on rally, though any setbacks would likely trigger sharp reversals in these pairs.
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