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   “¢   The USD losses ground after a slight disappointment from US inflation figures.
   “¢   Weaker US bond yields add to the USD selling bias and provided a modest lift.
   “¢   Nervousness over US-China trade talks keeps a lid on any meaningful up-move.

The AUD/USD pair struggled to extend softer US CPI-led positive move beyond the key 0.70 psychological mark and remained well below its daily tops.  

Slight softer than expected headline US CPI print for April, coupled with sliding US Treasury bond yields exerted some pressure on the US Dollar and provided a minor lift to the pair during the early North-American session.

Meanwhile, the core CPI came as per market expectations and showed a modest pickup in inflationary pressure, which helped limit any sharp USD slide and kept a lid on any strong follow-through up-move for the major.  

The increase in the US tariffs on $200 billion worth of Chinese goods and China’s threat to retaliate did little to ease concerns about a full-blown US-China trade war, which held investors from buying the China-proxy Aussie.  

However, the fact that China’s Vice Premier Liu He will remain in Washington for the second day of trade talks was seen as an indication that both sides are still determined to reach a deal and seemed to extend some support.

Adding to this, some signs of stability in the global financial markets further benefitted perceived riskier currencies – like the Australian Dollar, though it remains to be seen if the pair is able to capitalize on the intraday positive move.

Technical levels to watch