The Australian dollar (AUD) regained ground on Monday (21/4), lifting to the 0.6400 area during the American session, as improving risk sentiment and a generally weaker US dollar (USD) helped AUD/USD recover from recent losses. The earlier gains were driven by optimism around China's GDP, which grew 5.4% year-on-year in Q1, beating estimates. However, the recovery remains fragile amid ongoing US-China trade tensions and the Aussie's role as a proxy for Chinese demand.

ING strategists continue to stress that the Aussie remains exposed as a barometer of the US-China trade dispute, noting that while the RBA is likely to ease policy next month, the bigger driver for the AUD remains developments in trade and commodities. Domestically, the Australian economy is facing pressure from global decoupling, and an expected RBA rate cut in May could cap gains.

Daily Market Movers Summary: Gold Prices Soar as US Dollar Slips

Gold hit a new record near $3,319 an ounce, supported by safe-haven demand and lower Treasury yields.

Trump has called for an investigation into possible tariffs on all imports of critical minerals, citing national security concerns.

China has retaliated by issuing new export licenses for rare earths, increasing economic pressure on key US sectors.

China's Q1 GDP surprised with a 5.4% YoY increase; March activity indicators also beat estimates.

Chinese officials signaled a willingness to resume trade talks if the US adopts a more conciliatory tone.

The Australian dollar remains tied to US-China tensions, limiting upside potential despite strong risk appetite.

The RBA is still expected to cut rates in May, but China's proxy status leaves the AUD vulnerable to external headwinds.

The DXY is trading on the defensive near the 99.70 zone, failing to gain meaningfully from upbeat US data. (Newsmaker23)

Source: FXstreet