US producer prices surged 6.0% YoY in April, bolstering the USD and pressuring the Australian Dollar ahead of key US-China talks.
The AUD/USD pair retreated to near 0.7250 in Asian trading Thursday, weighed by stronger-than-expected US inflation data. The US Producer Price Index jumped 6.0% year-over-year in April, the largest increase in four years, exceeding March’s 4.3% rise and estimates of 0.5% monthly growth.
Traders are now focused on April US Retail Sales data, expected to show a 0.5% monthly gain, down from March’s 1.7%. Hotter inflation readings could further support the USD, adding pressure on the AUD. Meanwhile, US President Donald Trump’s meeting with Chinese President Xi Jinping in Beijing may influence the Aussie, given China’s role as Australia’s top trading partner.
Market reaction remains cautious as investors await cues from both the retail sales report and US-China discussions, which could sway risk sentiment and commodity-linked currencies like the AUD.