AUD/USD flirts with monthly high, sits above 0.6900 amid subdued USD demand – by hareshmenghani AUDUSD Fed RBA Bonds Currencies
sive day on Wednesday. Spot prices climbed to a fresh monthly high and held steady above the 0.6900 mark through the early European session.rate hike after several FOMC members said last week that they will likely stick to a 75 bps increase at the upcoming meeting. This was seen as a key factor behind the recent US dollar corrective pullback from a two-decade high, which, in turn, continued lending support to the AUD/USD pair.
Apart from this, a generally positive tone around the equity markets dragged the safe-haven buck to its lowest level since July 6 and benefitted the risk-sensitive aussie. The unsurprisingly hawkish Reserve Bank of Australia meeting minutes released on Tuesday further underpinned the Australian dollar and provided an additional boost to the AUD/USD pair.
Investors, however, seem convinced that the recent surge in US consumer inflation to a four-decade high would force the Fed to deliver a larger rate hike later this year. This, in turn, remained supportive of elevated US Treasury bond yields, which helped limit deeper losses for the greenback and capped the AUD/USD pair, at least for the time being.
Market participants now look forward to the US economic docket, featuring the release of Existing Home Sales data later during the early North American session. Apart from this, the US bond yields should influence the USD and provide some impetus to the AUD/USD pair. Traders will also take cues from the broader risk sentiment to grab short-term opportunities.