The Australian dollar maintains profits after the publication of salary price index data

• The Australian dollar maintains its position while the US dollar weakens after data from softer US inflation than expected.
• The Australian salary pricing index increased 0.9% intertrmetral in the first quarter, compared to the expected increase of 0.8%.
• The president of the USA, Donald Trump, described the relationship with China as excellent.

The Australian dollar (AUD) extends its profits against the US dollar (USD) on Wednesday after registering more than 1.50% profits in the previous session. The Aud/USD torque was strengthened as the US dollar weakened after more soft American inflation data than expected.

The Australian prime minister, Anthony Albanese, was invested for a second term on Tuesday after a decisive electoral victory. The key positions of the cabinet – including treasurer, external issues, defense and trade – permanent without changes. Albanese is scheduled to attend the opening mass of Pope Leo XIV in Rome on Sunday, where he will also meet with leaders such as the president of the European Commission, Ursula von der Leyen, to discuss commercial relations.

The US president, Donald Trump, told Fox News that he is working to obtain greater access to China, describing the relationship as excellent and expressing his willingness to negotiate directly with President XI on a possible agreement.

The decrease in global commercial tensions has led investors to reduce the expectations of aggressive cuts of interest rates in Australia. The markets now project that the Bank of the Australian Reserve (RBA) will reduce the cash rate to approximately 3.1% by the end of the year, a review of previous forecasts of 2.85%. However, it is widely expected that the RBA proceed with a 25 basic points cut at its next monetary policy meeting.

The Australian dollar receives support while the US dollar fights after softer inflation data

• The US dollar index (DXY), which measures the US dollar against a basket of six main currencies, is negotiating down around 100.90 at the time of writing. The operators expect the US Production Price Index (IPP) and the latest consumer’s feeling survey at Michigan University, which will be published later at the negotiation week.
• The US consumer price (CPI) increased increased 2.3% year -on -year in April, slightly below the 2.4% increase recorded in March and market expectations of 2.4%. The underlying IPC – which excludes food and energy – also rose 2.8% annually, coinciding with the previous figure and forecasts. In monthly terms, both the general CPI and the underlying CPI increased 0.2% in April.
• The US dollar was strengthened after the news that the United States and China reached a preliminary agreement to significantly reduce tariffs after productive commercial conversations during the weekend in Switzerland. According to the agreement, US tariffs on Chinese goods will be reduced from 145% to 30%, while China will reduce their tariffs on US imports from 125% to 10% – a movement widely seen as an important step towards the decapted of commercial tensions.
• 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 trade representative, Greer, described the discussions as a constructive movement towards the reduction of the commercial imbalance of 400 billion dollars. However, Greer later warned that if the agreement falls apart, tariffs on Chinese goods could be reinstated.
• The China’s consumer pricing index (CPI) decreased for the third consecutive month in April, falling 0.1% year -on -year, coinciding both with the market forecast and the fall registered in March, according to data published on Saturday by the National Statistics Office. Meanwhile, the production price index (IPP) contracted 2.7% year -on -year in April, more than the 2.5% drop in March and below the market expectation of a 2.6% decrease.
• Australia’s Westpac Consumer Trust Index increased by 2.2% intermensual to 92.1 in May, recovering from a 6.0% drop in the previous month and marking its third increase this year.
• The AI ​​Group Industry Industry of Australia showed an improvement in April, although it marked the 33rd consecutive month of contraction – participated 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 cash rate at 25 basic points to 3.85% later this month.

The Australian dollar could point to the 0.6500 barrier about six months maximum

The Aud/USD pair is negotiating about 0.6470 on Tuesday. The technical analysis of the daily chart indicates a bullish perspective, with the torque negotiating over the nine -day exponential (EMA) mobile average. In addition, the 14 -day relative force index (RSI) has also exceeded the 50’s mark, reinforcing the upward feeling.

The Aud/USD torque could test the maximum of six months of 0.6515, registered on December 2, 2024. A sustained breakdown above this level could pave the way for a movement towards the maximum of seven months of 0.6687 November 2024.

On the negative side, it is likely that the Aud/USD torque will try the nine -day EMA at 0.6433, followed by the 50 -day EMA around 0.6353. A decisive breakdown below these levels could weaken the impulse of prices in the short and medium term and open the door to a decrease towards 0.5914, a level not seen since March 2020.

AUD/USD: Daily graphic