AUD/USD trades marginally higher around 0.6500 amid receding US-China trade tensions

• AUD/USD edges up to near 0.6500 as the US Dollar trades subduedly.
• Receding US-China trade tensions turn out as a favorable scenario for the Australian Dollar.
• The Fed is almost certain to cut interest rates in the October policy meeting.

The AUD/USD pair ticks up to near 0.6500 during the Asian trading session on Monday. The Aussie pair edges higher as the Australian Dollar (AUD) gains slightly, following hopes that trade frictions between the United States (US) and China are receding.

Hopes of easing US-China trade tensions bolstered by comments from President Donald Trump, in an interview with Fox Business, that high tariffs were "not sustainable though it could stand". Trump added that the scheduled meeting with Chinese leader Xi Jinping in South Korea later this month remains on track.

Trade tensions between the US and China prompted after Beijing imposed export controls on rare earth minerals. In response, Washington announced 100% tariffs on imports from China.

Signs of easing US-China trade frictions bode well for the Australian Dollar (AUD), given that the Australian economy relies heavily on its exports to Beijing.

Meanwhile, the US Dollar (USD) trades subduedly at the start of the week, with investors shifting their focus on the delayed US Consumer Price Index (CPI) data for September, which will be published later this week.

The US inflation data will significantly influence market expectations for the Federal Reserve's (Fed) monetary policy outlook. According to the CME FedWatch tool, traders have fully priced in a 25-basis-points (bps) reduction in interest rates in the policy meeting this month.