AUD/USD rises above 0.6500 following domestic data, US-China trade talks eyed

• AUD/USD gains ground following the release of domestic mid-tier economic data on Wednesday.
• US Treasury Secretary Bessent and Trade Representative Greer are set to meet with Chinese Vice Premier He Lifeng in Geneva.
• The Fed is expected to hold rates steady later in the North American session.

The AUD/USD pair continues its upward momentum for the fourth consecutive session, hovering around the 0.6510 mark during Wednesday's Asian trading hours. The Australian Dollar (AUD) finds support from releasing domestic mid-tier economic data and improving global trade sentiment.

In April, the AiG Industry Index rose by 5.1 points to -15 on a seasonally adjusted basis, signaling modest improvement despite persistent headwinds in the industrial sector. Challenges such as global trade uncertainty, currency volatility, and the looming federal election continued to weigh on activity. Meanwhile, the AiG Manufacturing Purchasing Managers' Index (PMI) climbed 3.0 points to -26.7, up from -29.7 in the previous month.

Sentiment toward the AUD also improved as US-China trade tensions showed signs of easing. In a significant development, US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer are set to meet with Chinese Vice Premier He Lifeng in Geneva over the weekend, marking the first high-level talks since the US imposed tariffs that escalated into a global trade dispute.

China's Ministry of Commerce stated that, after carefully evaluating US proposals and considering global expectations, national interests, and industry feedback, Beijing has agreed to engage in the upcoming negotiations.

Looking ahead, investor attention is firmly on the Federal Reserve's (Fed) rate decision later on Wednesday. While the Fed is widely expected to hold rates steady, markets will scrutinize comments from Fed Chair Jerome Powell for any hints of a potential pivot toward rate cuts in the near term.