AUD/USD rises toward 0.6550 ahead of China's Trade Balance data

• AUD/USD gains ground ahead of China's Trade Balance data due on Monday.
• President Trump announced plans to raise 100% tariffs on Chinese imports.
• The US government shutdown will likely persist until Tuesday, with the Columbus Day holiday delaying any resolution.

AUD/USD advances after registering around 1.25% losses in the previous session, trading around 0.6530 during the Asian hours on Monday. The pair lost ground due to renewed trade tensions between Australia's close trading partner, China, and the United States (US). China's Trade Balance data will be eyed later in the day.

US President Trump stated on Friday that there was no reason to meet with China's President Xi Jinping during the upcoming summit in South Korea in two weeks. Trump also announced plans to impose 100% tariffs on Chinese imports. In response, China warned that it will retaliate if Trump fails to back down on his threat to impose 100% tariffs on Chinese imports, raising fears of how the trade war will impact the US economy.

Reuters, citing a report from The Age on Sunday, said a leaked brief from Australia's Prime Minister Anthony Albanese's department revealed that government officials have begun discussions with miners about contributing to a A$1.2 billion ($776.28 million) "critical minerals strategic reserve." Australia is considering setting minimum prices for critical minerals and providing funding for new rare earth projects under a proposed resources agreement with the United States.

The AUD/USD pair may draw support from the subdued US Dollar (USD), driven by the ongoing US government shutdown. The first US Federal paychecks for October were expected on Friday but were delayed due to the government shutdown. The disruption is expected to continue at least until Tuesday, as the United States observes the Columbus Day holiday on Monday, with no resolution to the shutdown yet in sight.