Australian Dollar Recovers on US Tariff Talks and China’s Strong Caixin PMI Ahead of ISM Manufacturing Data

Australian Dollar Recovers as US Trade Talks Shift and China’s PMI Improves

The Australian Dollar (AUD) bounced back against the US Dollar on Tuesday after earlier losses, bolstered by positive market sentiment following reports that US trade negotiators are lowering expectations for broad reciprocal agreements. The US aims for phased tariff deals before the July 9 deadline to avoid reinstating the most severe tariffs, according to the Financial Times.

Meanwhile, Australia's S&P Global Manufacturing PMI edged down to 50.6 in June from 51.0 in May, with production hitting its lowest since February due to sufficient client inventories and softer market demand.

China’s Caixin Manufacturing PMI climbed to 50.4 in June from 48.3 in May, surpassing the forecast of 49.0, which positively influenced the AUD given the close trade relationship between Australia and China.

Investors are now gearing up for the US ISM Manufacturing PMI release, a key indicator for the US economy and Federal Reserve’s monetary policy outlook, while the US Dollar continues to soften amid rising Fed uncertainty and fiscal concerns.

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