FX.co ★ Australian Dollar Holds Ground

The Australian dollar maintained its recent gains, hovering around $0.649 on Thursday. This stability resulted from a weaker US dollar combined with a positive shift in China's services PMI, which counterbalanced a dip in Australia's trade balance. The US dollar felt pressure due to lackluster US economic data, with market participants focusing on upcoming trade and jobless claims reports. The Australian currency gained additional backing as China's Caixin Services PMI, a crucial measure from its largest trading partner, rose to 51.1 in May from 50.7 in April, indicating ongoing growth. Simultaneously, Australia's trade surplus decreased to AUD 5.41 billion in April, falling short of predictions and dropping from a revised AUD 6.89 billion in March. This reduction was attributed to a 2.4% decline in exports and a 1.1% increase in imports. On the geopolitical landscape, trade issues also captured interest. Former President Trump described it as "extremely hard" to negotiate with Xi, despite prior hints that the two leaders might converse this week. Meanwhile, China is reportedly considering a significant deal with Airbus, marking a trend toward stronger EU ties.