AUD/USD climbs to 3-day tops, 0.70 mark back on sight amid notable USD weakness

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  • The USD added to the overnight losses amid a follow-through slide in the US bond yields.
  • Mixed Chinese inflation figures did little to influence or hinder the ongoing momentum.
  • The focus now shifts to the latest US consumer inflation figures, due later this Thursday.

The AUD/USD pair gained some positive traction for the second consecutive session on Thursday and built on the previous session’s solid rebound from 2-1/2 week lows.

The US Dollar witnessed some heavy selling on Wednesday in reaction to the Fed Chair Jerome Powell’s prepared statement for the semi-annual Congressional testimony and was seen as one of the key factors behind the pair’s intraday turnaround from the vicinity of 0.6900 handle.

Apart from Powell’s dovish sounding remarks, the pair got an additional boost after the June FOMC meeting minutes showed revealed that many policymakers judged additional monetary stimulus would be needed soon and revived hopes for an aggressive rate cut.

The USD bearish pressure remained unabated amid a follow-through slump in the US Treasury bond yields, which helped offset Thursday’s mixed Chinese inflation figures and remained supportive of the bid tone surrounding the China-proxy Australian Dollar.

However, in absence of any progress in the US-China trade talks, it remains to be seen if the pair is able to capitalize on the positive movement as the focus now shifts to the latest US consumer inflation figures and the second day of Powell’s testimony.

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