AUD/USD advanced to 0.6255 on Tuesday, extending Monday's rebound.
China announced tariffs on specific US goods.
Market sentiment improves on expectations of softer US data and potential RBA easing.
On Tuesday, the AUD/USD rose to 0.6255 as the pair extended Monday's comeback. The recovery comes after renewed US tariffs on China prompted by President Trump followed delays in tariffs on Canada and Mexico, the latter of which have eased trade war fears.
Meanwhile, aggressive bets on a February Royal Bank of Australia (RBA) rate cut and concerns over China's economic slowdown continue to weigh on the AUD.
Aussie up as China imposes tariffs on US
President Trump first announced a 25% duty on goods from Canada and Mexico but then agreed to postpone these tariffs for a month, easing immediate trade tensions. In tandem, a 10% tariff on Chinese imports remains in effect, while China has signaled it will contest these measures at the WTO.
The US Dollar experienced volatility after a brief rally that pushed the Dollar Index toward three-week highs near 110.00 and then fell toward 108.00.
On the data front, JOLTS Job Openings fell to 7.6 million in December, missing the 8 million consensus estimate.
On the home front, Australian CPI data for December is anticipated to show subdued inflation, forecast at around 2.5% YoY compared to 2.8% previously, which has bolstered market bets on a 25 bps RBA rate cut in February.
However, persistent concerns over China's weak recovery and sluggish domestic economic momentum continue to weigh on the Aussie.
Broader market risk sentiment remains cautious following recent
volatility in global equity and bond markets, while renewed geopolitical concerns and technology sector sell-offs have also added safe-haven demand for the US Dollar.(Cay) Newsmaker23
Source: Fxstreet
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