AUDUSD bouncing off the bottom, US inflation, Fed Minutes

The AUDUSD is easing near a one-month low after breaking a five-day downtrend.

As traders await top-tier data events on Wednesday, the AUDUSD falls to 0.6650 after bouncing off the lowest level in a month. As a result, the Aussie pair reflects the market’s cautious mood. Even as upbeat domestic catalysts joined the US Dollar’s weakness to entice the bull previously.

Positive Australian data and the barley deal outperform price-negative catalysts surrounding China to keep buyers optimistic.

Australia’s Westpac Consumer Confidence for April rose to its highest level since June 2022, printing 9.4% versus 0.8% expected and 0.0% prior. Furthermore, the National Australia Bank’s (NAB) Business Conditions matched the forecast figure of 16.0, versus 17.0 previously. While NAB Business Confidence fell to -1.0, compared to 0.0% expected and -4.0% previously.

In a similar vein, Australia’s Foreign Minister Penny Wong stated on Tuesday. “We reached an agreement with China to settle the dispute.” the barley dispute in Australia.” “China agreed to reconsider the duties imposed on Australian barley,” Wong said.

Cautious mood ahead of the key catalyst, as well as mixed sentiment, pose a challenge to Aussie pair buyers.

China’s cessation of military strikes near Taiwan. As well as mixed comments from US Federal Reserve (Fed) officials, allowed the AUDUSD bulls to maintain their lead. However, the market’s fading optimism about further rate hikes. Mixed messages from the International Monetary Fund (IMF). And softer China inflation prod the AUDUSD bulls.

However, disappointing China inflation data prods the AUDUSD bulls, as headline inflation figures for March, namely the Consumer Price Index (CPI) and Producer Price Index (PPI), came in at 0.7% YoY and -2.5% YoY, respectively, versus 1.0% and -1.4% priors.

Philadelphia Fed President Patrick Harker recently stated on Tuesday that the Federal Reserve will Continue to closely examine available data to determine what, if any, additional actions are required. Prior to him, Federal Reserve (Fed) Bank of New York President John Williams stated that if inflation falls, we will need to lower interest rates.

Furthermore, Chicago Fed President Austan Goolsbee stated on Tuesday that they must be cautious about raising interest rates in light of recent banking sector developments.

Furthermore According to Reuters, China concluded three days of military drills around Taiwan on Monday, claiming that they had tested integrated military capabilities under actual combat conditions, practicing precision strikes and blockading the island that Beijing considers its own.

In other news, the IMF reduced its global real GDP growth forecast for this year. from 2.9% in January to 2.8% in February. However, the global lender maintained its growth forecasts for China at 5.2% in 2023 and 4.5% in 2024.

To defend the AUDUSD rebound, RBA Governor Bullock must follow in the footsteps of Lowe.

Following that, RBA Assistant Governor (Financial System) Michele Bullock may provide immediate guidance to the AUDUSD pair ahead of the key US CPI and Fed Minutes.

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