The is almost unchanged on Wednesday. In the European session, AUD/USD is trading at 0.6532, up 0.03% on the day.
AUD/USD Technical
- AUD/USD tested resistance at 0.6532 earlier. Above, there is resistance at 0.6543
- 0.6519 and 0.6508 are the next support levels
China’s PPI Declines 3.6%
China’s producer price index () surprised on the downside in June, with a steep 3.6% y/y decline. This was below the May decline of 3.3% and the consensus of -3.2%. China has posted producer deflation for 33 successive months, and the June figure marked the steepest slide since July 2023. Monthly, PPI declined by 0.4%, unchanged over the past three months.
The soft PPI report was driven by weak domestic demand and the continuing uncertainty over US tariffs. The lack of consumer demand was reflected in the weak reading of 0.1% y /y, the first gain in four months. Monthly, declined by 0.1%, following a 0.2% drop in May. There was a silver lining as core CPI rose 0.7% y/y, the fastest pace in 14 months.
The uncertainty over US President Trump’s tariff policy continues to perplex the financial markets. Trump had promised a new round of tariffs against a host of countries on July 9, but he has delayed that deadline until August 1.
China, the world’s second-largest economy after the US, has taken a hit from US tariffs, as China’s exports to the US are down 9.7% this year. However, China has mitigated much of the damage as China’s exports to the rest of the world are up 6%. There is a trade truce in effect between the two countries, but the bruising trade war will continue to dampen US-China trade.
FOMC Minutes – What Will Be Powell’s Tone?
With no tier-1 events out of the US today, the of the June meeting will be on center stage. The Fed held rates at that meeting, and Fed Chair Powell, who has taken a lot of heat from Donald Trump to , defended his wait-and-see attitude, citing the uncertainty that Trump’s tariffs are having on US growth and inflation forecasts.