“¢ A slump in the US bond yields weigh on the USD and lend some support.
“¢ Growing fears of a global trade war keep a lid on any strong positive move.
“¢ The focus remains on the upcoming RBA policy meeting, due next Tuesday.
The AUD/USD pair quickly reversed a dip to the 0.6900 neighbourhood, albeit remained well within its daily trading range and below the 0.6935 supply zone.
The US President Donald Trump’s surprise move to levy tariffs on all Mexican imports triggered a fresh wave of global risk-aversion trade and drove investors towards traditional safe-haven assets. The global flight to safety led to collapsing US Treasury bond yields, which exerted some downward pressure on the US Dollar and turned out to be one of the key factors lending some support to the major.
Meanwhile, better than expected US economic releases – personal income/spending data and the core PCE price index, did little to provide any boost to the greenback, albeit fears of a full-blown US-China trade war and RBA rate cut speculations kept a lid on any meaningful up-move for the China-proxy Australian Dollar.
With investors still awaiting fresh updates on the US-China trade relations, the key focus remains on the upcoming RBA monetary policy meeting on Tuesday, which coupled with a slew of important macro releases scheduled at the beginning of a new month will play an important role in determining the pair’s next leg of a directional move.
In the meantime, Friday’s US economic docket also features the release of Chicago PMI and revised UoM consumer sentiment index, which might help traders grab some short-term opportunities on the last trading day of the week ahead of the scheduled release of Chinese manufacturing PMI during the Asian session on Monday.
Technical levels to watch
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