• AUD/USD rises modestly on Wednesday as market sentiment improves
• Optimism over US-China trade talks supports risk assets
• Traders await Australia’s PMI data on Thursday and US inflation on Friday

AUD/USD trades slightly higher around 0.6500 on Wednesday at the time of writing, up about 0.10% for the day. The pair benefits from a renewed risk-on mood, as investors welcome more constructive signals on the trade front between the United States (US) and China. In this context, the Australian Dollar (AUD) is outperforming slightly, while the US Dollar (USD) remains more hesitant.

Risk-sensitive flows have strengthened ahead of a new round of discussions between policymakers from Washington and Beijing, seen as an opportunity to ease tensions over tariffs, export controls, and technology sharing. In the background, the recently signed bilateral agreement on critical minerals between the United States and Australia is viewed as a further step toward securing supply chains, a structurally positive factor for an Australian economy highly dependent on commodities.

On the data front, the pair remains sensitive to upcoming releases. In Australia, Thursday’s preliminary Purchasing Managers’ Index (PMI) figures will provide a snapshot of early-quarter activity momentum and may influence expectations regarding the Reserve Bank of Australia (RBA). In the United States, the Consumer Price Index (CPI) for September, due Friday, remains the week’s key event for markets, with potential implications for the Federal Reserve (Fed) and, consequently, for the US Dollar (USD).