What's Driving the Australian Dollar's Recovery?Elon Musk meme coin price
The Australian Dollar (AUD) demonstrates notable strength in Wednesday's trading session, recovering from Tuesday's 0.50% decline against the US Dollar (USD). This rebound follows significant economic releases from both Australia and China that are reshaping market expectations.
Australian Inflation Data Surprises Markets
The Australian Bureau of Statistics revealed first-quarter CPI growth of 0.9% quarter-over-quarter, significantly exceeding both the previous quarter's 0.2% increase and market projections of 0.8%. Annual inflation reached 2.4%, surpassing the anticipated 2.2% figure. These numbers suggest persistent price pressures that could influence the Reserve Bank of Australia's policy decisions.
China's Manufacturing Sector Contracts Again
China's National Bureau of Statistics reported April's Manufacturing PMI at 49.0, down from March's 50.5 and below the 49.9 consensus estimate. This contraction follows brief expansion in the previous month, raising concerns about regional economic momentum. The Non-Manufacturing PMI also softened to 50.4 from 50.8.
Global Trade Developments Impact AUD Sentiment
Recent statements from US and Chinese officials suggest potential easing in trade tensions, though concrete progress remains uncertain. Market participants are closely monitoring:
- Potential reductions in US automotive tariffs
- China's selective exemptions on US goods
- Ongoing diplomatic communications between the nations
Technical Outlook for AUD/USD
The currency pair currently trades near 0.6390, maintaining position above key moving averages. Technical indicators suggest:
- Bullish momentum above the 9-day EMA at 0.6382
- Potential resistance at the recent 4-month high of 0.6449
- Support levels at 0.6314 (50-day EMA) and 0.5914 (long-term support)
Market Watch: Upcoming Economic Events
Traders await the US PCE Price Index release, which could provide further direction for the USD. The RBA's upcoming policy meeting remains in focus as inflation data alters rate cut expectations.
