The Australian dollar strengthened against the US dollar on Wednesday, recouping the previous session's losses. This boost came from comments by RBA Assistant Governor Sarah Hunter: recent data appeared slightly stronger than expected, Q3 inflation is likely higher, the labor market and economic conditions could be tighter than assumed, and the board is prepared to adjust policy accordingly—although she acknowledged consumer momentum could weaken in Q3.

The AUD's movement was also influenced by China's inflation release: September CPI -0.3% YoY (expected -0.1%; August -0.4%) with monthly CPI +0.1% (below the 0.2% forecast). PPI -2.3% YoY (from -2.9%) indicates producer price pressures are starting to ease. Because Australia and China are closely linked to trade, any changes in Chinese demand are quickly reflected in the AUD.

On the external risk front, US-China trade tensions have escalated again. US President Donald Trump has threatened further restrictions if Beijing continues with rare earth mineral export controls and additional port levies; both countries are preparing new port charges. Improving global sentiment could give the AUD room to strengthen further, but escalating tensions or further weakening Chinese data could potentially reverse this rally. (az)

Source: Newsmaker.id