- AUD/USD is likely to draw some buyers near 0.6500 during early Asian trading on Monday.
- The US non-farm payroll saw an increase of 139,000 in May, exceeding expectations.
- Later on Monday, China’s CPI inflation figures will attract attention.
The AUD/USD pair is inching up to around 0.6500 in the early hours of the Asian session on Monday. It seems the Australian dollar might gain some strength against the US dollar following news that President Trump would engage in trade discussions with China today.
Trump mentioned that U.S. Treasury Secretary Scott Bescent, along with two other officials, are set to meet with Chinese representatives in London. These trade talks come at a time when the US and China are addressing a number of issues amidst the ongoing trade war. Given that China is a key trading partner for Australia, there’s a glimmer of hope that negotiations between these two major economies might provide some lift to the Aussie.
On the flip side, there’s stronger-than-expected economic data from the US that could fortify the dollar and present challenges for this pair. Data from the U.S. Bureau of Labor Statistics released on Friday indicated a rise in US non-farm payroll (NFP) of 139K in May, slightly up from the revised figure of 147K in April, which had been previously indicated as 177K. This figure was better than the anticipated 130K.
Additionally, the unemployment rate held steady at 4.2% in May. Annual wage inflation, as measured by changes in average hourly earnings, remained stable at 3.9%, surpassing the forecast of 3.7%.
Investors are also waiting for China’s Consumer Price Index (CPI) inflation figures and trade balance data for May. If this data suggests a decline in inflation, it might put downward pressure on the AUD against the USD in the short term.
