AUD/USD eases trims gains but remains near YTD highs above 0.6600

• The Aussie stands tall, near year-to-date high as trade deals boost risk appetite.
• The US reached a deal with Japan on Wednesday, is closing in on another with the Eurozone, and will resume talks with China next week.
• Hawkish comments from RBA's Bullock cast doubt on an August rate cut.
  

The Aussie is pulling back from the eight-month highs at 0.6625 hit earlier today, as the US Dollar pares some losses, but remains above 0.6600, consolidating gains after having rallied about 2% over the last five days.

The trade deal between the US and Japan and hopes of an immediate agreement with the Eurozone have eased concerns about a global trade war and are boosting investors' appetite for risk.

Apart from that, US Treasury Secretary Scott Bessent affirmed earlier this week that US and Chinese officials will meet in Stockholm next week, aiming to extend the tariff deadline. This news adds support to the AUD, as China is Australia's major trading partner.

Earlier today, RBA Governour, Michelle Bullock, reiterated the need for a cautious approach on interest rates as she assessed, inflationary risks have been brought under control without deteriorating the labour market. These comments cast doubt on the widely expected rate cut after the August 12 meeting and have provided additional support to the Aussie.

The US Dollar, on the other hand, remains on the defensive amid the positive market sentiment, with investors awaiting US Preliminary PMI figures and weekly Jobless claims data for further insight into the economic activity and the momentum of the labor market.