**AUD/USD Stays Steady as Trump Softens China Rhetoric; DXY Sees Modest Recovery**
*Based on original reporting by Yohay Elam for FXStreet, with analysis and additional insights incorporated.*
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### Overview
The AUD/USD currency pair remained steady in recent sessions, reflecting a cautious environment as traders responded to a shift in tone from former U.S. President Donald Trump regarding China. At the same time, the U.S. Dollar Index (DXY) recovered slightly after a period of softness, impacting broader forex market sentiment. The relative stability in AUD/USD highlights the intertwined relationship between global monetary policy, risk appetite, and geopolitical headlines.
This article details the immediate price action, underlying factors affecting the Australian and U.S. dollars, the impact of Trump’s remarks, ongoing U.S.-China economic relations, and broader implications for forex traders and the global economy.
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### Recent AUD/USD Price Action
– The AUD/USD currency pair traded largely unchanged after former President Donald Trump adopted a more conciliatory tone towards China in his recent statements.
– Earlier in the trading session, the pair experienced mild downward pressure as the U.S. dollar started to recover from recent losses.
– By late New York trading, AUD/USD was hovering around the 0.6290 level, having retraced a small fraction of its earlier gains.
**Technical highlights:**
– Support levels for AUD/USD were observed near 0.6270 and further towards 0.6220.
– Resistance stood around 0.6330 and then at the 0.6380 handle.
– Short-term momentum indicators suggested a consolidative phase, with Relative Strength Index (RSI) values neither in overbought nor oversold territory.
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### The Trump Factor: Dampened China Rhetoric
A notable market mover in the session was the change in rhetoric from former U.S. President Donald Trump. In recent history, Trump’s stance toward China has greatly influenced global risk sentiment, as well as the performance of currencies tied to global trade, such as the Australian dollar.
#### Trump’s Recent Remarks
– Trump had previously adopted a confrontational tone regarding U.S.-China trade relations, contributing to increased volatility in risk-sensitive assets and emerging market currencies.
– In his most recent public comments, Trump appeared to moderate his language, suggesting a willingness to negotiate and expressing confidence that a favorable outcome could be reached for both nations.
– Market participants interpreted these remarks as reducing the imminent risk of further escalation, thereby stabilizing risk appetite.
#### Implications for the Australian Dollar
– The Australian economy is heavily reliant on trade with China, its largest export partner, particularly in commodities like iron ore and coal.
– The Aussie dollar is seen as a proxy for global risk, benefiting from positive sentiment regarding China’s economic health and U.S.-China trade relations.
– Trump’s softened approach reduced the perceived tail risk for a breakdown in negotiations, fostering stability in AUD/USD.
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### U.S. Dollar
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