AUD Falters as US Inflation Weighs, Trump-Xi Summit Looms

The Australian dollar's rally has faltered as stronger US inflation data and rising crude oil prices weighed on AUD/USD. The currency remains sensitive to China, the yuan, and broader risk appetite ahead of next week's Reserve Bank of Australia (RBA) decision.

RBA Governor Bullock struck a hawkish tone before the House, warning that inflation risks are materialising through the Middle East conflict and other cost pressures. She made it clear that demand needs to cool while productivity remains weak, keeping the door open to another hike.

Australia's final employment report this week will likely matter less if Governor Bullock decides to ramp up expectations of a hike when she speaks on Tuesday. The jobs report may be overshadowed by the Trump-Xi summit in Washington, where trade tensions will dominate the agenda and potentially impact AUD/USD.