While the stock-market selloff triggered a wave of speculation about a possible bursting stock bubble, investors were in no rush to buy safe havens and to dump risky assets.
NZD/USD and AUD/USD actually became the outperformers among the major currency pairs.
Does that mean the market stopped loving USD or is it just a temporary correction of the most oversold currencies?
In order to answer the question, we need to dig into fundamental drivers of the recent commodity currency sell-off.
All About Trade
The key point of pressure for AUD was the news of the China-US trade war. The escalation of that conflict should drive decreased demand for imported Chinese goods. And guess who is Australia's key trading partner? That's right, it's China.
However on Thursday there were rumors that China is ready for a new round of talks, which gives hope that two big economies will be able to come to an agreement. If so, it may support AUD/USD on its further way up.
The pair is currently trying to test the high for the day at 0.7128. A move higher will open the way up to 0.7145.