Aussie rallies as new prime minister picked

Australia has a new PM

Australian PM Malcolm Turnbull confirmed his resignation earlier this morning and stated he will not stand for PM as the ruling Liberal Party voted 45-40 to hold a leadership ballot.  Subsequently former Treasurer Scott Morrisson won the ballot and was elected PM, with former Energy Minister Josh Frydenberg winning the party vote for deputy leader..

AUD/USD was little changed on the announcement of Turnbull’s resignation, hovering above one-week lows after suffering its worst day versus the US dollar since June 14, but then rallied after the new PM was announced. The pair touched 0.7290, testing the 200-hour moving average, before edging back to 0.7275. The question whether a general election will be called will no doubt breed uncertainty and should help to cap Aussie rallies in the days ahead.

AUD/USD Hourly Chart

Source: Oanda fxTrade

Trade talks came and went

No result from yesterday’s trade talks between the US and China, matching expectations of those in- and outside the meeting. China’s Ministry of Commerce released a statement saying the parties held “constructive and candid” talks in the session and both parties will keep in touch regarding the next steps.

Separately, an official at China’s National Development Reform Commission warned that the US tariffs on China goods would impact companies and procurers in the US and was closely monitoring the impact on China’s high-tech industry. The country will stick to the current innovation strategies, the official added.

Tariffs support U.S dollar

Slow data day until Powell speaks

There’s not a great deal of tier-1 data for markets to latch on to until Fed chairman Powell’s speech at Jackson Hole at 1400 GMT. We do see the revision for Q2 German GDP, though expectations are for no change from the preliminary reading. US durable goods orders for July is the only other item of note.

You can view the full MarketPulse data calendar at: https://www.marketpulse.com/economic-events/

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