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  • The uptick in the US stock futures lifts AUD/USD. 
  • Political tensions and weakness in commodities could cap AUD’s upside. 
  • On the data front, the focus will be on the US CPI. 

The buying pressure around the safe-haven US dollar weakens with signs of risk reset in the US stock futures and allows a bounce in AUD/USD. 

Flashing green

AUD/USD is trading near 0.7270 at press time, representing a 0.20% gain on the day. Meanwhile, the futures tied to the S&P 500 are adding 0.57%. 

However, the Aussie dollar may have a tough time extending or posting sustainable gains during the day ahead due to simmering US-Australia tensions and weakness in commodities like oil, copper, and iron ore. 

On Thursday, China accused Australia of hypocrisy and double standards amid escalating tensions between the two countries, according to apnews.com.  At the same time, Australian journalists said Chinese authorities questioned them for an investigation into an Australian citizen’s detention. 

Also, the trend in AUD/USD will likely be influenced by the US Consumer Price Index for August. The data due at 12:30 GMT is expected to show the cost of living rose 0.3% month-on-month, following July’s 0.6% rise. A batter-than-expected data could yield a broad-based US dollar rally. 

The American stocks fell on Thursday, with major indices losing over 1% in value, courtesy of a continued sell-off in technology stocks. The risk-off tone put a bid under the US dollar and pushed AUD/USD lower by over 0.30% to 0.7248. 

Technical levels