AUD/USD gains traction to around 0.6445 in Friday’s early Asian session.
The renewed tariff concerns weigh on the US Dollar.
Rising bets of further RBA rate cuts might cap the pair’s upside.
The AUD/USD pair gains ground to near 0.6445 during the early Asian session on Friday. The US Dollar (USD) edges lower against the Australian Dollar (AUD) due to the resurgence of trade uncertainty and disappointing US economic data. The US April Personal Consumption Expenditures (PCE) Price Index report Will be in the spotlight later on Friday.
A US federal court on Wednesday blocked US President Donald Trump's "Liberation Day" tariffs from going into effect. A federal trade court ruled Trump didn't have the authority to impose across-the-board duties on imports from nations that sell more to the US than they buy.
However, a federal appeals court late Thursday temporarily paused a sweeping ruling against Trump’s global tariffs while it takes more time to consider the administration’s request for a longer-lasting hold. The uncertainty of Trump's policies and concerns that tariffs will slow the economy drag the Greenback lower and create a tailwind for the pair.
Data released by the US Department of Labor (DOL) on Thursday showed that US Initial Jobless Claims for the week ending May 24 climbed to 240K, compared to the previous week of 226K (revised from 227K). This figure came in above the market consensus of 230K. Additionally, Continuing Jobless Claims increased by 26K to reach 1.919M for the week ending May 17.
On the other hand, the expectation that the Reserve Bank of Australia (RBA) will deliver more rate cuts in the upcoming policy meetings could undermine the Aussie. The RBA acknowledged progress in curbing inflation and warned that US-China trade barriers pose downside risks to economic growth. RBA Governor Michele Bullock noted that the central bank will take additional action if the economic outlook worsens, raising the chance of further rate cuts.
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