Forex
Home›Forex›Major Pairs›Australian Dollar holds gains near 0.6980 after China…
Australian Dollar holds gains near 0.6980 after China data
AUD/USD was last around 0.6980 during Asian hours as stronger China activity supported the Australian currency while softer US inflation kept the Fed outlook less hawkish.
AUD/USD extended gains for a second straight day, trading around 0.6980 during Wednesday’s Asian session, as the Australian dollar benefited from a fresh batch of economic data out of China, a key trading partner. FXStreet cited China’s second-quarter GDP expansion of 0.9% quarter-on-quarter, alongside retail sales growth of 1.0% year over year and industrial production rising to 5.3%.
The report also pointed to mixed China signals, including annual June retail sales and industrial production beating expectations, while fixed asset investment fell 5.7% year to date in June versus an expected 4.9%. Overall, the data backdrop helped keep AUD supported.
FXStreet also linked AUD/USD’s gains to softer US inflation, which weighed on the US dollar. It noted that June CPI eased to 3.5% year over year, and that headline CPI declined 0.4% month over month, reinforcing hopes the Federal Reserve could take a less hawkish stance.
Markets are now pricing in about a 50% chance of a Fed rate hike in September, according to the CME FedWatch Tool, according to FXStreet. The piece added that Fed Chair Kevin Warsh reiterated the central bank’s commitment to restoring price stability in congressional testimony without signaling a more aggressive policy move.