**AUD/USD Maintains Upward Momentum Near 0.6510 Ahead of Key US Inflation Data**
*Adapted from an article by VT Markets, with expanded insights and additional research.*
—
The AUD/USD pair continued its steady rise in the early sessions on Tuesday as it moved closer to the 0.6510 level, reflecting ongoing market optimism and anticipation ahead of upcoming US inflation data releases. The pair, often seen as a barometer of risk sentiment and global growth expectations, has recently been underpinned by robust Australian economic indicators, while US dollar movements remain closely tied to interest rate expectations in response to evolving inflation dynamics.
This extensive review will delve into the recent movements in the AUD/USD pair, key drivers influencing its trajectory, and expectations around the near-term economic agenda, focusing especially on potential impacts from US inflation reporting and other influencing macroeconomic factors.
—
### Recent Performance of AUD/USD
The Australian dollar has shown a persistent upward trend against the US dollar in recent days, with the AUD/USD pair marking a notable surge above the 0.6500 psychological mark and consolidating near 0.6510 in the latest Asian trading session. This movement follows a renewed wave of selling in the US dollar, prompted by shifting expectations regarding the Federal Reserve’s monetary policy stance and a series of softer-than-expected US economic data releases.
**Key Highlights:**
– **Opening Strength:** The pair began the week above 0.6470 and quickly pushed higher as Asian trade commenced, testing the 0.6510 resistance zone.
– **Supportive Aussie Data:** Improved trade figures and upbeat retail sales from Australia have contributed to the Aussie’s gains, providing evidence of underlying economic resilience.
– **US Dollar’s Retreat:** The greenback has softened broadly amid growing speculation around potential Federal Reserve interest rate cuts later in the year, as inflation data appears to be easing.
—
### Key Drivers Influencing AUD/USD
#### 1. **Domestic Australian Economic Data**
The Australian dollar’s appeal has been supported by positive news from both the trade and retail sectors in Australia.
– **Trade Surplus Expansion:** Australia reported a larger-than-expected trade surplus, reflecting resilient demand for Australian exports such as iron ore and coal—key contributors to the country’s foreign exchange earnings.
– **Retail Sales Recovery:** Monthly retail sales figures registered a notable improvement, suggesting that consumer spending remains robust despite higher interest rates and cost-of-living concerns.
– **RBA Policy Outlook:** The Reserve Bank of Australia’s relatively hawkish tone in its latest policy communications has also buoyed the currency, with the central bank signaling that further rate hikes are possible if inflation proves sticky.
#### 2. **Global Risk Sentiment**
The AUD is often classified as a “risk-sensitive” currency, meaning it tends to do well when investors are optimistic about global economic growth and move out of defensive assets like the US dollar.
– **China’s Economic Signals:** As Australia’s largest trading partner, China’s economic performance
Read more on AUD/USD trading.