FX.co ★ Australian Dollar Edges Higher

The Australian dollar rose to about $0.651 on Tuesday, recovering from the previous session's downturn, as market sentiment became cautiously optimistic. This shift follows the extension of the US-China trade agreement and anticipation of the Reserve Bank of Australia's upcoming policy decision. The US-China trade truce was prolonged for another 90 days, a maneuver intended to mitigate tensions and facilitate continued dialogue, which analysts view as a positive measure to prevent further exacerbation of the trade conflict. In Australia, all eyes are on the RBA's interest rate decision, expected later today. There is a prevailing sentiment that a third rate cut in the current cycle is imminent, with markets forecasting a 25 basis points reduction in the official cash rate to 3.60%. Core inflation is currently measured at 2.7% year-on-year. While the central bank is likely to express confidence regarding the labor market's resilience, it may strike a cautious note in light of the recent rise in the unemployment rate.