Australian Dollar Rises As Trump Suggests New Trade Deal With China

(RTTNews) - The Australian dollar strengthened against other major currencies in the Asian session on Thursday, after optimistic comments from U.S. President Donald Trump that trade deal with China is "possible".

As markets continued to be cautious, Trump restated some of his most important statements early on Thursday. Trump said he expects Chinese President Xi Jinping to visit and that a new trade agreement with China is feasible. He added that his administration is thinking about imposing a 25% tariff on lumber and forest products, and he referenced talks with China about TikTok.

The Australian dollar also appreciated following the release of Australia's employment data and China's interest rate decision.

Data from the Australian Bureau of Statistics showed that the Australian economy added 44,000 jobs last month to 14,634,300, exceeding expectations for an increase of 19.400 jobs following the increase of 56,300 jobs in the previous month.

Full-time employment increased by 54,100 to 10,092,800 people, while part-time employment decreased by 10,100 to 4,541,500 people.

Meanwhile, the unemployment rate in Australia came in at a seasonally adjusted 4.1 percent in January, in line with expectations and up from 4.0 percent in December.

The People's Bank of China maintained its interest rates unchanged for the fourth straight time. The PBoC left its one-year loan prime rate unchanged at 3.10 percent. Likewise, the five-year LPR, the benchmark for mortgage rates, was retained at 3.60 percent. The decision matched expectations.

The bank had reduced its both LPRs by 25 basis points each in October 2024.

In the Asian trading today, the Australian dollar rose to nearly a 2-1/2-month high of 1.6375 against the euro and more than a 2-week high of 0.9057 against the Canadian dollar, from yesterday's closing quotes of 1.6435 and 0.9029, respectively. If the aussie extends its uptrend, it is likely to find resistance around 1.60 against the euro and 0.92 against the loonie.

Against the U.S. dollar, the aussie advanced to a 3-day high of 0.6372 from an early 6-day low of 0.6328. On the upside, 0.65 is seen as the next resistance level for the aussie.

The aussie edged up to 1.1136 against the NZ dollar, from Wednesday's closing value of 1.1123. The next possible upside target for the aussie is seen around the 1.13 region.

Looking ahead, Eurostat releases euro area construction output data for December at 5:00 am ET in the European session.

At 6.00 am ET, the Confederation of British Industry publishes Industrial Trends survey results for February. The order book balance is forecast to rise to -30 in February from -34 in January.

In the New York session, Canada new housing price index, PPI data and raw material price index, all for January, U.S. weekly jobless claims data, U.S. Philly Fed business conditions for February, U.S. Consumer Board's leading index for January and U.S. EIA crude oil data are slated for release.