AUD/USD gains ground above 0.6300 ahead of Chinese data

• AUD/USD edges higher to around 0.6325 in Monday's early Asian session.
• China has launched special initiatives to boost consumption and raise incomes. 
• Michigan Consumer Sentiment Index slumped in March to the lowest since 2022. 

The AUD/USD pair gathers strength to near 0.6325 during the early Asian session on Monday. The uptick of the pair is bolstered by the weaker US Dollar (USD) and special plans from the Chinese government to boost consumption and raise incomes. Traders brace for the Chinese economic data later on Monday, including Retail Sales and Industrial Production. Also, the US February Retail Sales will be released on the same day. 

On Sunday, China announced to boost consumption by raising people's incomes as a key driver of economic growth. The measures will include stabilizing the stock and property markets, and offering incentives to increase the country's birth rate, as the government seeks to alleviate the deflationary pressures afflicting the economy. 

Additionally, the government will include boosting employment and raising the minimum wage, as well as strictly enforcing the paid annual leave system. Any positive developments surrounding the Chinese stimulus plan could boost the China-proxy Australian Dollar (AUD), as China is a major trading partner to Australia. 

On the USD's front, the University of Michigan (UoM) published its preliminary Consumer Sentiment Index reading for March, showing that the figure fell to 57.9, the lowest since November 2022, from 64.7 in the previous reading. This reading came in below the consensus estimate of 63.1. Meanwhile, the UoM five-year Consumer Inflation Expectation jumped to 3.9% in March, compared to 3.5% in February. 

Markets widely expect the Federal Reserve (Fed) will stay on hold when it concludes its two-day meeting on Wednesday. The financial markets have priced in nearly a 75% chance of a quarter-point reduction to the Fed's policy rate by June, according to the CME FedWatch tool.