AUD/USD and NZD/USD Fundamental Daily Forecast – Investors Turn More Optimistic About US-China Trade Deal

The Australian and New Zealand Dollars are bouncing back on Friday after yesterday’s steep sell-off. On Thursday, the Aussie and Kiwi fell on reports that a summit meeting between the United States and China to hammer out the details of a trade deal will be delayed.

U.S. Treasury Secretary Steven Mnuchin said on Thursday that a trade summit between President Donald Trump and his Chinese counterpart Xi Jinping would not happen at the end of March as had been previously suggested because there was more work to do in trade negotiations.

Trump said whether a trade deal can be reached with China would probably be known in the next three or four weeks.

At 08:43 GMT, the AUD/USD is trading .7087, up 0.0022 or +0.32% and the NZD/USD is at .6853, up 0.0029 or +0.42%.

CNBC said, “Chinese negotiators, meanwhile, have suggested combining a long-discussed state visit by Xi Jinping to the U.S. with the announcement of any forthcoming agreement – they also said Beijing wants a deal to be fully ironed out before Xi sat down with Trump.”

“For his part, Li on Friday did not disclose details on the latest progress of the trade talks. He emphasized that the United States and China remained in close discussions, and expressed confidence that both sides had enough wisdom to diffuse tensions.”

In Other News….

New Zealand’s Business NZ Manufacturing Index came in at 53.7, up from 53.0. However, Visitor Arrivals fell 0.1% and last month’s number was revised lower to 2.7%.

Daily Forecast

Positive developments over U.S.-China trade relations are likely to continue to boost demand for the Australian and New Zealand Dollars. The Forex pairs could receive an additional boost if U.S. government reports come in weaker-then-expected.

Investors seem to have shifted their tone to more positive in regards to the timing of a U.S.-China trade deal. According to a report by Xinhua news agency, Chinese Vice Premier Liu He spoke via telephone with U.S. Trade Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer.

In the U.S., the Empire State Manufacturing Index is expected to come in at 10.1, up from 8.8. The Capacity Utilization Rate is expected to have risen slightly from 78.2% to 78.5%.

Industrial Production is forecast to have risen from -0.6% to 0.4% and University of Michigan Consumer Sentiment could come in at 95.5, up from 93.8.

The JOLTS Job Openings could come in slightly lower at 7.27M versus the previously reported 7.34M.