- AUD/USD gains traction from risk-on sentiment and China's stimulus measures.
- Hawkish RBA stance and soft US inflation maintain upside potential for AUD/USD.
- Markets are still betting on a 50 bps cut by the Fed.
The AUD/USD gained traction on Friday, climbing by 0.20% to 0.6910. Optimism surrounding China's stimulus measures, including monetary easing by the People's Bank of China (PBOC), provided support to the Australian Dollar, boosting risk appetite among investors. Personal Consumption Expenditures (PCE) figures from the US from August came in soft, also prompting USD weakness.
On one hand, the Reserve Bank of Australia (RBA) doesn't plan on cutting rates while the Federal Reserve (Fed) has already started its easing cycle, which adds downward pressure to the pair.
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