AUD/USD strengthens on China's positive developments ahead of Wespac Consumer Confidence

• AUD/USD firms above prior psychological resistance, now support at 0.6500.
• China's positive trade data and trade negotiations with the United States contribute to AUD strength. 
• Australia looks ahead to Tuesday's Wespac Consumer Confidence data for signs of how Australians feel about the economy, which could impact AUD/USD price action.

The Australian Dollar (AUD) is trading higher against the US Dollar (USD) on Monday, with the AUD/USD pair firming above the 0.6500 resistance level at the time of writing.

The positive shift in sentiment is being supported by developments in US-China relations, with senior officials, including US Treasury Secretary Scott Bessent and China's Vice Premier He Lifeng, meeting in London for two days of intensive talks that will focus on trade and export controls, particularly surrounding rare earth minerals.

The meetings, scheduled for Monday and Tuesday, aim to ease tensions and rebuild diplomatic and economic ties. Progress in these discussions could lift global risk sentiment and indirectly benefit the AUD by boosting demand for Australian exports to China. 

Separately, China's May trade surplus surprised to the upside, coming in at $103.22 billion, above expectations of $101.3 billion and April's $96.18 billion. The stronger data signals resilient global demand and potential recovery in Chinese industrial activity, further supporting the AUD on expectations of stronger Chinese import demand and improved overall market confidence.

AUD/USD hinges on Australian Consumer Confidence data due on Tuesday 

On Tuesday, Australia will release its Westpac Consumer Confidence index for June, providing a snapshot of how Australians perceive current and future economic conditions. In May, the index rose by 2.2%, showing a modest improvement in sentiment. This data matters because consumer confidence is a leading indicator of spending, which plays a major role in contributing to Australia's economic growth. A stronger-than-expected print can support the Aussie Dollar by signalling economic resilience, while a weak reading may raise concerns about domestic demand, reinforcing dovish expectations for future interest rate meetings of the Reserve Bank of Australia (RBA).