AUD to be the beneficiary of the US-China trade war?

Jarratt Davis

Special Consultant to the FPA
Sentiment update for the New York trading session, 23th March 2018

During today's London session, the market's overall focus has remained on trade war concerns following President Trump announcing tariffs on China of up to $60bln with China in return announcing tariffs on the US of $3bln.

Consequently, safe havens have been well supported with JPY and CHF the strongest currencies on the day.

Although a trade war between China and the US was initially expected to be negative for Australia as it would likely lead to less demand for raw materials; many analysts are now suggesting it could be AUD positive if China firms substitute US products with Australian products.

Overall, the latest trade war developments between the US and China have resulted in USD remaining the laggard on the day although most currency pairs remain within recent ranges.

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