Australian Dollar climbs as markets assess Trump's remarks post-PPI

• Aussie nears 0.6300 amid softer US Dollar.
• Risk sentiment fluctuates as potential reciprocal tariffs loom between China and the US.
• The USD failed to capitalize on strong PPI data.

The Australian Dollar (AUD) gains ground against the US Dollar (USD) on Thursday. Despite these gains, the risk-sensitive AUD faces headwinds from fears of a potential global trade war, as United States (US) President Donald Trump announced he will impose reciprocal tariffs on every country that charges duties on US imports.

Daily digest market movers: Aussie holds firm after upbeat US PPI and tempered tariff concerns

• The tariffs may begin to be imposed within weeks as Trump's trade and economic team study bilateral tariff and trade relationships.
• The US Dollar Index (DXY) remains under pressure as traders balance headwinds and tailwinds, including a prospective Ukraine-Russia peace deal, the United States Producer Price Index (PPI) data, and reciprocal tariffs to be imposed.
• A knee-jerk US Dollar rally ensued after stronger-than-expected PPI figures, but the currency reversed course once President Trump and President Vladimir Putin agreed to start peace talks with Ukraine.
• Recent labor figures support moderate optimism: United States Jobless Claims for the week ending February 7 came in at 213,000, below consensus, and Continuing Claims fell to 1.850 million from 1.886 million.
• The monthly headline PPI for January ticked up to 0.4%, surpassing the 0.3% estimate but lower than December's revised 0.5%. Core PPI came in at 0.3% as expected.
• On the trade front, Trump reiterated his threat of a 100% tariff on BRICS countries and raised issues about unchanged tariffs for many nations. He also criticized the European Union's trade relationship with the United States, fueling geopolitical uncertainties.

AUD/USD technical outlook: Momentum builds as pair stays above 20-day Simple Moving Average

The Relative Strength Index (RSI) stands at 57, in positive territory and rising sharply, indicating growing buyer conviction. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator prints flat green bars, reflecting a modest but stable uptrend.

By holding firmly above its 20-day Simple Moving Average, the Aussie displays potential for further gains, though lingering tariff threats and shifting risk sentiment could quickly alter the current outlook.