AUDUSD is on a multiple hot streak despite mixed China trade data

The AUDUSD is higher for the third day in a row, despite China’s trade data failing to show impressive results for March. And Australia’s Consumer Inflation Expectations for April being lower. The rise in the Australian pair could be attributed to the early-morning release of Australian employment data. Nonetheless, the risk barometer pair is up around 0.6710.

China’s trade surplus narrows even as exports increase in March.

However, China’s headline Trade Balance improved to $88.10 billion in March, up from $39.2 billion expected and $116.8 billion the previous month. With exports growing much faster than imports.

Strong Australian employment outweighs softer consumer inflation expectations, propelling the AUDUSD amid widespread US Dollar weakness.

However, China’s headline Trade Balance improved to $88.10 billion in March, up from $39.2 billion expected and $116.8 billion the previous month, with exports growing much faster than imports.

Earlier in the day, the Australia Bureau of Statistics (ABS) reported that Employment Change increased by 53K versus 20K expected and 64.6K prior, while the Unemployment Rate remained unchanged versus the expected rate of 6.4%. 3.6% is a significant figure. Furthermore, the Participation Rate increased to 66.7%, exceeding market expectations of 66.6%.

Furthermore, Australia’s Consumer Inflation Expectations for April fell to 4.6% YoY from 5.3% expected and 5.0% previously.

It should be noted that the previous day’s dovish remarks from Reserve Bank of Australia (RBA) Assistant Governor (Financial System) Michele Bullock, along with the latest fears of easy inflation and the RBA’s pause in rate hike trajectory, prod the AUDUSD bulls.

Inflation in the United States, downbeat Fed Minutes renew policy pivot talks, and the US Dollar and yields are weighed.

The odds of the US Federal Reserve (Fed) policy pivot, on the other hand, have increased following disappointing US inflation data. And unimpressive FOMC Minutes. Nonetheless, the US Consumer Price Index (CPI) fell to its lowest level since May 2021, falling to 5.0% year on year. In March from 6.0% in February. Prior to and in comparison, to market forecasts of 5.2%. However, the annual Core CPI,  excluding Food and Energy, increased to 5.6% YoY during the same month, matching forecasts and exceeding 5.5% previously.

Furthermore, the minutes of the most recent Federal Open Market Committee (FOMC) Monetary Policy Meeting challenged the Fed hawks. By stating that expectations for rate hikes have been reduced due to the turmoil in the banking sector. “Several Federal Reserve policymakers considered pausing interest rate increases last month. Following the failure of two regional banks and a forecast from Fed staff that banking sector stress would tip the economy into recession,” Reuters reported.

Furthermore, the most recent comments from Fed policymakers, including San Francisco Federal Reserve Bank President Mary Daly and Richmond Federal Reserve Bank President Richmond Federal Reserve President Thomas Barkin suggests easing inflation and challenges to the Fed’s hawkishness, as well as the US Dollar.

Against this backdrop, Australian yields remain firmer. While S&P 500 Futures post minor gains and the US Dollar remains under pressure in the midst of cautiously optimistic markets.

To summaries, the AUDUSD may rise further today due to a light calendar. However, the US Producer Price Index (PPI) and Fed meetings will be watched for clarity.

AUDUSD Daily Trends