- AUD/USD weakened as the US Dollar strengthened amid rising market risk aversion.
- China’s CPI rose 1.2% YoY in April, above March’s 1.0% increase and the 0.8% forecast.
- US Nonfarm Payrolls rose by 115K in April, beating forecasts despite slowing from March’s 185K increase.
AUD/USD gains ground after opening at a bearish gap but still remains in the negative territory, trading around 0.7240 during the Asian hours on Monday. The pair moves little despite stronger-than-expected China’s Consumer Price Index (CPI) data. Any change in the Chinese economy could impact the Australian Dollar (AUD) as China and Australia are close trading partners.
China’s Consumer Price Index (CPI) rose 1.2% YoY in April, accelerating from March’s 1.0% increase and beating the 0.8% forecast. CPI inflation arrived at 0.3% MoM in April, versus a fall of 0.7% prior, hotter than the expectation of a 0.1% decline. Producer Price Index (PPI) rose 2.8% YoY in April, following a 0.5% increase in March. The data came in above the market consensus of a 1.5% rise.
The AUD/USD pair came under pressure as the US Dollar (USD) strengthened amid growing risk aversion after US President Donald Trump and Iran dismissed each other’s latest peace initiatives aimed at ending the Middle East conflict.
According to Bloomberg on Sunday, Trump turned down Iran’s latest peace proposal, describing it as “totally unacceptable.” Iranian state television reported that an Iranian official said Tehran’s response emphasized ending the conflict across all fronts, particularly in Lebanon, while also addressing the security of shipping routes through the strait, though no details were provided regarding how or when the key waterway could reopen.
An extended Middle East conflict and the fragile ceasefire between the US and Iran may continue to support safe-haven demand for the Greenback, potentially weighing on the major currency pair in the near term.
The US Bureau of Labor Statistics released data on Friday indicating that Nonfarm Payrolls (NFP) increased by 115K in April, down from March’s 185K reading but still exceeding the market forecast of 62K. At the same time, the Unemployment Rate remained unchanged at 4.3% in April, matching analysts’ expectations.
