AUDUSD pair attracted new buyers near the 0.6400.
On Tuesday, the AUDUSD pair attracted new buyers near the 0.6400 round-figure level. Continuing its steady intraday advance during the early portion of the European session. Spot prices have recovered further from the lowest level since November 2022. Reaching a multi-day high in the last hour, closer to the mid-0.6400s.
A resurgence in risk sentiment, as well as falling US bond rates, weigh on and support the USD.
A minor improvement in global risk sentiment, fueled by anticipation for additional stimulus from China. Encourages some selling in the safe-haven US dollar. This helps the risk-averse Australian Dollar (AUDUSD). A little weaker tone around US Treasury bond rates adds to the USD’s woes. Nonetheless, the possibility of future. Fed policy tightening should operate as a tailwind for US bond rates and the Greenback.
Fed hawkishness is expected to restrict USD losses and contain the pair in the face of China’s economic problems.
It is worth noting that markets have been pricing in the likelihood of another 25 basis point. Fed rate rise before the end of this year. Incoming US macro data continued to suggest to a very robust economy. Allowing the Fed to hold interest rates higher for a longer period of time. As a result of the hawkish forecast, the yield on the benchmark 10-year. US government bond rose to its highest level since 2007. on Monday, favoring USD bulls.
Aside from that, concerns about China’s deteriorating economic conditions should keep the optimism and the China-proxy Aussie in check. This, together with expectations for another RBA on-hold decision in September. May deter traders from initiating strong bullish wagers on the AUDUSD pair. As a result, it is important to wait for significant follow through purchasing before concluding. That spot prices have bottomed out.
AUDUSD investors may also choose to stay on the sidelines ahead of the pivotal Jackson Hole Symposium.
Investors may also choose to stay on the sidelines ahead of the pivotal Jackson Hole Symposium. When Fed Chair Jerome Powell’s remarks will be analyzed for clues about the Fed’s future rate-hike path. This, in turn, will have an impact on the USD price dynamics and assist decide the next move.
The AUDUSD pair is in the middle of a directional move. Traders will also have to contend with the publication of flash PMI prints from Australia and the United States, both of which are scheduled for Wednesday.
Meanwhile, Tuesday’s US economic calendar, which includes Existing Home Sales and the Richmond Manufacturing Index, as well as statements by prominent FOMC members and US bond rates, will fuel USD demand. Furthermore, the overall risk attitude in the market should contribute to the creation of short-term trading opportunities in the AUDUSD pair.
