The AUD/USD Re-Treats: Jobs, RBA Hike, and Trade Tensions Ahead

The Australian dollar's rally finally faltered last week due to stronger US inflation data, rising crude oil prices, and a firmer US dollar. The AUD/USD pair is now re-tracing as market attention shifts to Australia's final employment report before next week's RBA decision.

RBA Governor Bullock struck a hawkish tone in her recent hearing, warning that inflation risks are already materializing through the Middle East conflict and other cost pressures. She also emphasized that demand needs to cool while productivity remains weak, keeping the door open for another hike.

The Trump-Xi summit is also on the horizon, with trade likely to dominate the agenda. Markets will be watching for progress on extending the US-China tariff truce, alongside potential tariff reductions and agricultural purchases.