Shane Oliver, Head of Investment Strategy and Chief Economist at AMP, remarked on the potential RBA rate path after the US-China trade war truce, stating:

“Following the US/China 90 day tariff cuts money market expectations have fallen back to around 3.3 more 0.25% RBA rate cuts this year (down from around 5 back in early April), but with a 0.25% cut 99% priced in for next week.”

Click here for a more comprehensive analysis of AUD/USD trends and trade data insights.

Later today, Fed speakers may influence cross-currency rate dynamics. Hawkish Fed cues, signaling a near-term hold on policy moves, could widen the rate differential in favor of the US dollar, sending the AUD/USD pair below the 200-day EMA toward the 0.63623 support level and the 50-day EMA.

However, rising support for a June Fed rate cut may narrow the rate differential, favoring the Aussie dollar. A more dovish Fed stance could drive AUD/USD toward $0.65144.