The Australian dollar can be seen due to the growing optimism after two days of discussions between the US and China

• The Australian dollar is gaining support in the midst of the growing optimism about commercial conversations between the US and China in Geneva.
• The Vice Primer Minister of China, He Lifeng, described the negotiations as “an important first step” towards the stabilization of relations between the two countries.
• The US Treasury Secretary, Besent, and the Commerce Representative, Greer, described the conversations as a step towards reducing the commercial imbalance of 400,000 million dollars.

The Australian dollar (AUD) is taking advantage of its recent impulse, rising against the US dollar (USD) per second consecutive session on Monday. The Aud/USD pair benefits from the growing optimism around commercial conversations between the US and China held in Geneva. As Australia maintains strong economic ties with China, developments in the Chinese economy often have a direct influence on the AUD.

After two days of negotiations aimed at relieving commercial tensions, both USA and China reported “substantial progress.” The Vice Primer Minister of China, He Lifeng, described the conversations as “an important first step” towards the stabilization of bilateral relations. Meanwhile, the US Treasury Secretary, Besent, and the Commerce Representative, Greer, described discussions as a constructive movement towards the reduction of commercial imbalance of 400,000 million dollars.

Adding to the focus in China, President Xi Jinping is scheduled to speak at the opening ceremony of the fourth ministerial meeting of the Chinese-Celac Forum in Beijing on May 13.

Looking ahead, operators are attentive to the important Australian economic data, including the Maypac consumer confidence index of May and the business conditions of April NAB, both scheduled for Tuesday, which could offer new clues for the AUD. Investors are also focused on the upcoming US data, with consumer inflation figures planned for Tuesday, followed by retail sales and producer price index on Thursday, while evaluating the initial impact of the commercial dispute on the economy in general.

The Australian dollar advances due to progress in commercial conversations between the US and China

• The American dollar index (DXY), which measures the US dollar in front of a basket of six main currencies, is in decline for the second consecutive day, around 100.60 at the time of writing. However, the US dollar found some support after the Trump administration reported advances in commercial conversations with China during the weekend in Switzerland.
• The Treasury Secretary, Scott Besent, described the two -day discussions in Geneva with Chinese officials as “productive”, adding that more information will be provided at a press conference on Monday morning. At present, China faces US tariffs of 145%, while Beijing has responded with a 125% tariff on US exports.
• Meanwhile, the Secretary of Commerce, Howard Lutnick, declared that the 10% base tariff applied to other countries is expected to “remain in force for the foreseeable future.”
• Last week, the Federal Reserve (FED) maintained interest rates without changes in 4.25%–4.50%, but its accompanying statement highlighted the growing concerns about inflation and unemployment, adding a layer of uncertainty to market prospects.
• The president of the FED, Jerome Powell, at a press conference after the meeting, warned that the current commercial tariffs could hinder the efforts of the Central Bank to manage inflation and employment in 2025. He also suggested that the persistent instability of the policy could lead to the Fed to adopt a more cautious and waiting more approach with respect to future movements of fees.
• The China’s consumer price index (CPI) decreased for the third consecutive month in April, falling 0.1% year -on -year, matching both market forecast and the fall registered in March, according to data published on Saturday by the National Statistics Office. Meanwhile, the producer price index (IPP) contracted 2.7% year -on -year in April, more pronounced than the 2.5% drop in March and below the market expectation of a 2.6% decrease.
• On the Commercial Front, China registered a commercial surplus of 96.18 billion dollars in April, exceeding the forecast of 89 billion, but below the 102.63 billion March. Exports increased by 8.1% year -on -year, exceeding 1.9% expected, but slowing down from the 12.4% increase seen above. Imports fell 0.2% year -on -year, a slightest decrease than the planned -5.9% and -4.3% of March. China’s commercial surplus with the US was reduced to 20.46 billion dollars from 27.6 billion March.
• In the real estate sector, Beijing is considering an important reform that would prohibit housing presale and restricted transactions to completed properties. The proposed regulation, aimed at providing stability to the real estate market, would apply to future land sales, excluding public housing, leaving implementation to local governments.
• The AI ​​Group Industry index in Australia showed an improvement in April, although it marked the 33rd consecutive month of contraction, particularly driven by the weakness in manufacturing dependent on exports. These signals of persistent weakness have strengthened market expectations that the Bank of the Australian Reserve (RBA) could cut its interest rate at 25 basic points to 3.85% later this month.

The Australian dollar could fall towards 0.6400 after breaking below the nine -day em.

The aud/USD torque is quoting around 0.6420 on Monday. The technical analysis of the daily chart suggests a neutral bias, since the torque has maintained its position below the ascending channel pattern. However, the 14 -day relative force (RSI) index remains comfortably above 50, suggesting that the bullish bias is still at stake.

On the positive side, the Aud/USD torque could return to the ascending channel and re -test the maximum of six months in 0.6515, reached on December 2, 2024. A break above this level could support the torque to approach to the maximum of seven months of 0.6687, which was reached in November 2024. An additional support seems to be in the upper limit of the upward channel around 0.6730.

The Aud/USD torque is testing its initial support in the nine -day EMA at 0.6420, followed by the 50 -day EMA at 0.6345. A rupture below these levels could weaken the upward perspective and could expose to 0.5914, the lowest level since March 2020.

AUD/USD: Daily graphic