The Australian dollar (AUD) rose against the U.S. dollar (USD) on Friday, extending its gains for the third consecutive day. Traders are looking forward to the U.S. non-farm payrolls report (NFP) to be released later in the day for new insights on the U.S. economy.

Market sentiment improved after a productive phone call between U.S. President Donald Trump and Chinese President Xi Jinping. Trump said the call was productive and was ready to continue tariff negotiations. However, Trump and his team appeared to have difficulty keeping calm during their exchanges with Chinese trade officials. It is important to note that any changes in the Chinese economy could affect the Australian dollar as China and Australia are close trading partners.

Minutes from the Reserve Bank of Australia's (RBA) May meeting showed that policymakers saw a stronger case for a 25 basis point rate cut and preferred a cautious and predictable policy. RBA Assistant Governor Sarah Hunt said on Tuesday that "higher U.S. tariffs will be a drag on the global economy" and warned that higher uncertainty could curb investment, output and employment in Australia.