AUD/USD gains ground to near 0.6420 in Monday’s early Asian session.
China’s CPI fell for the third month amid ongoing economic struggles.
The US and China cite progress in Geneva trade talks.
The AUD/USD pair edges higher to around 0.6420 during the early Asian session on Monday. Optimism in US-China trade negotiations in Geneva, Switzerland, boosts the Australian Dollar (USD) against the Greenback.
China’s Consumer Price Index (CPI) fell for the third month in April as the country grapples with sluggish spending amid a fierce trade war with the US. Data released by the National Bureau of Statistics of China on Saturday showed that the CPI dropped by 0.1% YoY in April after declining 0.1% in March. The market consensus was for a 0.1% decrease in the reported period. Meanwhile, Producer Price Index (PPI) fell 2.7% YoY in April, compared to a 2.5% fall in March. The figure came in lower than the market consensus of -2.6%.
The US and China reported “substantial progress” after two days of talks in Switzerland aimed at de-escalating a trade war. China's Vice Premier He Lifeng described trade talks with US officials as “an important first step” in stabilising bilateral trade relations, while US Treasury Secretary Scott Bessent said the two sides made “substantial progress.
However, traders will keep an eye on the US-China trade talks in detail. The US would share details on Monday, and the positive developments could provide some support to the China-proxy Aussie, as China is a major trading partner of Australia.
Additionally, Chinese officials have eased key monetary policy tools in an attempt to boost domestic economic activity. These include an interest rate cut and a lowering of bank reserve requirements, both of which are intended to stimulate more lending. This, in turn, contributes to the Australian Dollar’s upside.
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