AUD/USD rises strongly on weak USD, breaking above 0.6350

AUD/USD edged up to around 0.6370 during early Asian trading on Monday. The Australian dollar (AUD) attracted some buying as the Chinese government announced a rural revitalization plan in its annual policy blueprint.

China will step up rural reforms to revive the agricultural sector and boost food security in the face of U.S. tariffs, an economic slowdown and climate change, according to the State Council's annual rural policy blueprint. In addition, Premier Li Keqiang said on Thursday that China will work harder to promote consumption and improve people's livelihood. Any positive developments regarding China's stimulus package could boost the Australian dollar, which is China's main trading partner.

Weak US economic data dragged the US dollar lower, creating a tailwind for AUD/USD. Data released by S&P Global on Friday showed that its composite purchasing managers' index (PMI) fell to 50.4 in February from 52.7. Meanwhile, the manufacturing PMI rose to 51.2 in February from 51.6 in January, beating expectations of 51.5. Finally, the services PMI fell to 49.7 in February from 52.9 in January, missing expectations for a reading of 53.0.

Investors will be watching inflation data this week and closely following U.S. President Donald Trump's tariff headlines. Any signs of escalating uncertainty and trade tensions could boost the U.S. dollar (USD), which serves as a safe-haven currency.