The AUD/USD pair started the week strong, clinging to the 0.6300 level early Monday. This positive momentum is largely attributed to improved market sentiment and limited tariffs on Chinese imports, which were announced by U.S. President Donald Trump. Markets responded to the weekend’s news that U.S. tariffs on China’s semiconductors and electronics would remain at 20%, rather than being raised to 145%.
This decision has provided some relief, extending risk appetite from Friday’s American session into early Asian trades. The S&P 500 futures also reflected this positive tone, showing nearly a 0.80% gain.
Improved market sentiment supports AUD/USD
China’s response to the ongoing trade tensions was to implement additional tariffs on U.S. goods, increasing them to 125% from 84%. However, China noted that it would not respond further to U.S. actions, which helped stabilize market sentiment and supported the risk-sensitive Australian Dollar (AUD). Looking ahead, the focus will shift to Chinese trade data, which will be released later in the week.
Investors will be particularly interested in export numbers amid the persistent trade war, as these figures could provide fresh trading incentives for the AUD/USD pair. Though the full effects of the U.S. tariffs may not yet be reflected, the data could offer new insights for traders. Overall, the AUD/USD pair is holding onto its recovery momentum from the five-year lows experienced recently, and investors will be looking for further stability or a potential continuation of the uptrend based on forthcoming economic indicators and central bank commentaries.
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