Tuesday’s Asian session sees the AUDUSD pair slide down for the third straight day. Reaching a multi-day low that is closer to the 0.6800 round-figure level.
Following the release of the Reserve Bank of Australia (RBA) meeting minutes. Which revealed that the debate over raising interest rates vs pausing it was closely divided. The Australian Dollar (AUD) declines a little. But the board made a decision in this situation. the balance of inflation risks had swung to the upside since the May meeting, making the case for an early raise stronger. The RBA restated its readiness to take whatever steps were required to achieve target inflation over a “reasonable” period of time. However, this doesn’t really excite optimistic traders or provide the AUDUSD pair any support.
A positive increase in US bond yields weighs on the AUDUSD and serves as a tailwind for the dollar.
The US Dollar (USD), on the other hand, improves on its current rebound from and gains some positive momentum for the third day in a row. more than a one-month low in the midst of a decent increase in US Treasury bond yields. A milder risk tone also strengthens the safe-haven dollar and puts pressure on the AUDUSD pair.
Spot prices reached their highest point since February 2023 last Friday, or a retracement of over 100 pips. In the 0.6900 neighborhood after the most recent leg down. Before concluding that the recent upward trajectory seen since the beginning of this month has peaked. It will still be wise to wait for significant follow-through selling. Prior of Fed Chair Jerome Powell’s congressional testimony on Wednesday and Thursday. Which could offer new hints about the trajectory of future rate hikes, traders could also opt to stay out of the market.
The hawkish RBA meeting minutes and the PBoC rate reduction fail to convince bulls to provide any assistance.
The Australian dollar is not helped by news that China is considering a significant stimulus program. To strengthen the economy or a decision by the People’s Bank of China (PBoC) to lower one-year and five-year Loan Prime Rates (LPRs) this Tuesday.
