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  • AUD/USD underpinned by US-China currency pact and Huawei news.
  • All eyes on the US CPI and trade developments for the next direction.

The bulls appear to take a breather in the European trading, allowing the AUD/USD pair to consolidate the Asian bounce to near 0.6760 region, as markets await the US inflation data for fresh impetus ahead of the key US-China trade talks.

At the press time, the spot remains strongly bid near the midpoint of the 0.67 handle

The higher-yielding Aussie bounced-off four-day lows of 0.6710 and rallied nearly 45-pips, in a knee-jerk reaction to a Bloomberg report that cited “the White House is looking at rolling out a previously agreed currency pact with China as part of an early partial deal that could pave the way for a suspension of the planned tariff increase next week,” according to FXStreet’s Analyst Omkar Godbole.

The currency pact would be followed by more negotiations on core issues like intellectual property and forced technology transfers, the people familiar with the matter told Bloomberg.

Further, the Chinese proxy, the AUD, also cheered the news about the White House planning to issue licenses allowing some American companies to supply nonsensitive goods to the Chinese telecom giant Huawei. These moves by the US appear to ease the US-Sino trade tensions, as all eyes now remain on the high-level trade talks due later on Thursday in Washington.

Meanwhile, on the data front, the US September CPI report will be closely eyed for fresh hints on the US interest rates outlook, after the Fed Chair Powell said, in his recent speeches, the Fed remains data-dependent amid trade risks and global growth concerns.

AUD/USD Technical levels