AUD/USD advances to near 0.6570 on upbeat Australian Dollar, US CPI eyed

• AUD/USD climbs to near 0.6570 as the antipodean trades firmly.

• China’s Q2 GDP data beats estimates, lifting demand for the Australian Dollar.

• Investors await the US CPI data for June, which will influence market expectations for the Fed’s monetary policy outlook.

The AUD/USD pair jumps to near 0.6570 during the European trading session on Tuesday. The Aussie pair gains sharply as the Australian Dollar (AUD) outperforms its peers, following the release of upbeat China’s Q2 Gross Domestic Product (GDP) data earlier in the day.

China’s National Bureau of Statistics (NBS) reported that the economy expanded 5.2% in the April-June period compared to the same quarter of the previous year, faster than estimates of 5.1%, but slower than the 5.4% growth seen in the previous quarter. On a quarterly basis, the Chinese economy grew by 1.1%.

Meanwhile, Industrial Production surprisingly rose at a faster pace of 6.8% in June. Economists anticipated the factory data to have grown moderately by 5.6% against 5.8% in May.

Strong Chinese data strengthens the Australian Dollar (AUD), given that the Australian economy relies heavily on its exports to Beijing.

On the domestic front, investors await the employment data for June, which is scheduled to be released on Thursday. The employment report is expected to show that Australian employers added 20K fresh workers. The Unemployment Rate is seen steady at 4.1%.

In the United States (US), investors await the Consumer Price Index (CPI) data for June, which will be published at 12:30 GMT. The US CPI report is expected to show that the headline inflation rose at a faster pace of 2.7% on year, compared to a 2.4% growth seen in May. In the same period, the core CPI – which excludes volatile food and energy prices – is estimated to have accelerated to 3% from the prior release of 2.8%.

Signs of price pressures accelerating would discourage Federal Reserve (Fed) officials from endorsing interest rate cuts.