The Australian dollar (AUD) continued its uptrend against the US dollar (USD) for the sixth straight session on Wednesday (16/4), with the AUD/USD pair holding firm after the release of the Westpac Leading Australia Index. The index's six-month annualized growth rate, which estimates economic momentum relative to trend over the next three to nine months, eased to 0.6% in March from 0.9% in February.

China's economy grew at an annualized rate of 5.4% in the first quarter of 2025, matching the pace seen in Q4 2024 and beating market expectations of 5.1%. On a quarterly basis, GDP rose by 1.2% in Q1, following a 1.6% increase in the previous quarter, lower than the 1.4% increase expected.

Meanwhile, China's Retail Sales jumped 5.9% year-on-year, beating expectations of 4.2% and up from 4% in February. Industrial production also outperformed, rising 7.7% compared with a forecast of 5.6% and a reading of 5.9% in February.

The AUD also found support from improved global risk sentiment after US President Donald Trump exempted key technology products from newly proposed "reciprocal" tariffs. The exemptions—which cover smartphones, computers, semiconductors, solar cells and flat-panel displays—apply mostly to goods manufactured in China, Australia's largest trading partner and a major buyer of its commodities.

The Australian 10-year government bond yield dipped to 4.33% as investors digested the minutes from the Reserve Bank of Australia's (RBA) March 31–April 1 meeting. The minutes showed that Q1 data showed trimmed mean inflation fell below 3% while consumer demand appeared to be picking up. The RBA signaled that while the May meeting could be a good time to review monetary policy, no decision has been made yet. Markets are currently pricing in a 25 basis point interest rate cut in May and are pricing in around 120 basis points of easing over the course of the year. Focus now turns to Thursday's jobs report, which could provide key labour market signals and influence the RBA's next move. (Newsmaker23)

Source: FXstreet