Aussie Dollar Climbs on Renewed US–China Trade Optimism and RBA Outlook

The Australian Dollar surged on Monday, buoyed by growing optimism over easing tensions between the United States and China. Signs of progress in trade discussions between the world’s two largest economies have boosted demand for risk-sensitive currencies, lifting the Aussie to its highest levels in weeks.

Confidence rose after Washington signaled it would delay imposing additional tariffs on Chinese goods, while Beijing reportedly suspended planned restrictions on rare earth exports. The move reignited hopes for a broader and more lasting trade agreement, helping to ease concerns that had recently weighed on global growth sentiment.

Australia, which counts China as its largest trading partner, stands to gain significantly from a thaw in relations between Washington and Beijing. Stronger trade ties tend to boost demand for Australian commodities, such as iron ore and coal, supporting the local currency and export revenues.

Domestically, attention now turns to the upcoming release of Australia’s third-quarter Consumer Price Index (CPI). The inflation data, due midweek, is expected to shape expectations for the Reserve Bank of Australia’s next policy move. The central bank has reiterated its commitment to lowering inflation while maintaining solid employment levels, signaling a careful balance between economic stability and price control.

Meanwhile, the US Dollar remains under pressure ahead of the Federal Reserve’s policy decision later this week. Market participants are increasingly anticipating a rate cut before year-end following recent signs of softening inflation in the United States.

Overall, the combination of trade optimism and steady domestic fundamentals has given the Australian Dollar a fresh boost, positioning it as one of the strongest major currencies at the start of the week. Investors will now be watching both the RBA’s tone and the Federal Reserve’s next steps for further clues on the currency’s near-term direction.