- AUD/USD gains on Friday during the early European trading hours.
- US Dollar Index turns slightly negative despite a rebound in US Treasury yields.
- China proposes talks with Australia despite going cold war and recent tense relations, Xi-Biden also brighten mood.
AUD/USD edges higher on Friday morning. The pair opened lower but gathers momentum before the European trading hours to trade at the day’s high level.
At the time of writing, AUD/USD is trading at 0.7388, up 0.22% for the day.
The US Dollar Index (DXY), which tracks the performance of the greenback against its six major rivals retreats from the higher levels but heads toward weekly gains.
The US Initial Jobless Claims fell to a fresh pandemic low, at 310K in August much below the market expectations of 350K.
On the other hand, the Aussie dollar manages to gain some traction after a recent report suggested that most regions in Vicotria exited lockdown on Friday, and Melbourne and Sydney would end extended lockdown in the coming weeks.
Meanwhile, despite numerous trade restraints from China on Australian goods and services offers the Australian government for support in joining a regional trade pact. This, also add to the optimism for the riskier asset. Furthermore, cautious optimism from US President Joe Biden, during his six-pronged strategy speech, preceded the first in seven months talks between Biden and his Chinese counterpart Xi Jinping brightened the mood.
As per the recent data, inflation expectations in Australia declined 3.30% in August from 3.70 in July.
It is worth noting that S&P 500 Futures are trading at 4,493.28, down 0.46% for the day.
As for now, traders await the US PPI data to gauge the market sentiment.