- AUD/USD wobbles around 0.6500 as investors await the outcome of US-China trade negotiations.
- The outcome of US-China trade talks will provide certainty for the US economic outlook.
- The US inflation is expected to have grown at a faster pace in May.
The AUD/USD pair flattens around 0.6500 during European trading hours on Tuesday. The Aussie pair trades in a tight range as investors have sidelined, awaiting the outcome of trade talks between the United States (US) and China in London, which started on Monday.
The US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, ticks up to near 99.15.
High-stake trade talks between the US and China are expected impact the US Dollar significantly, which has been battered in past few months. Investors doubted the safe-haven appeal of the US Dollar as market experts warned that the implementation of new economic policies by US President Donald Trump could result in economic shockwaves.
A positive outcome from trade negotiations between the US and China would bring some certainty in come US economic outlook, allowing businesses to strategize their expansion plans.
On the economic front, investors await the US Consumer Price Index (CPI) data for May, which will be released on Wednesday. According to estimates, the US headline and core CPI grew at a faster pace of 2.5% and 2.9%, respectively.
Meanwhile, the Australian Dollar (AUD) trades calmly amid US-China trade talks. The Aussie Dollar will also be impacted by the Sino-US meeting outcome, given that Australia is the leading trading partner of China.
On the domestic front, investors await one-year Consumer Inflation Expectations data for June, which will be released on Thursday. The forward inflation data will influence market expectations for the Reserve Bank of Australia’s (RBA) monetary policy outlook. In May, the inflation data came in at 4.1%.
