Aussie Dollar Surges Amid Hopes of US-China Trade Thaw

The Australian dollar gained against the US dollar, driven by optimism over potential US-China trade discussions. The kiwi dollar also rose, while the euro edged higher. The US dollar remains on track for a weekly gain despite prior tariff-induced market turmoil.

The Australian dollar saw gains against the U.S. dollar on Friday, buoyed by optimism surrounding potential trade talks between the United States and China. This development comes as both nations appear to be moving towards a potential thaw in their trade relations, with the euro also experiencing a slight increase.

Risk-sensitive currencies, such as the Australian and New Zealand dollars, made advancements as a rally in Asian shares mirrored gains on Wall Street. A key element in this positive shift is China's offshore yuan, which has strengthened to a near one-month high. Meanwhile, the U.S. dollar is expected to register a third consecutive weekly advance, recovering from losses driven by President Trump's tariff policies and resultant recession fears last month.

U.S. Secretary of State Marco Rubio recently indicated that trade discussions with China are on the horizon. His remarks followed a Chinese state media report suggesting Beijing's willingness to negotiate. As a result, Australia's dollar increased by 0.5%, while the kiwi added 0.4%, further reflecting their role as liquid stand-ins for the yuan due to close trade ties with China.

(With inputs from agencies.)