Edge-Forex Forex

AUD/USD closes in on a weekly high, targeting 0.7000 amid significant USD selling

On Thursday, AUD/USD attracts new bids and climbs again towards the weekly high. The USD is weighed down by and supported by the uncertainties around the Fed’s rate-hike trajectory. The risk-averse Aussie gains from the risk-on mindset, which further weakens the Dollar.

On Thursday, the AUD/USD pair regained momentum and maintained a strong bid tone into the middle of the European session. Just a few pips below the weekly high reached on Wednesday; the pair is now trading around the 0.6975-0.6980 range.

The AUD/USD pair is seen benefiting from the US Dollar’s significant corrective drop from a one-month high due to several reasons. Lower US Treasury bond rates are a result of the uncertainty around the Fed’s rate-hike trajectory. This, together with the risk-taking desire, puts pressure on the safe-haven Dollar and helps the risk-averse Australian.


Investors have become more upbeat in light of lessening inflationary pressures and expectations that the People’s Bank of China (PBoC) may further reduce interest rates during the second quarter. The Reserve Bank of Australia’s hawkish view, which indicates that more rate hikes will be required to guarantee that inflation returns to goal, also supports the Australian Dollar.

However, the likelihood of more Fed policy tightening supports the possibility of some USD dip-buying emerging, which might limit the upside for the AUD/USD pair. Several FOMC members on Wednesday agreed with Fed Chair Jerome Powell’s assessment that further rate increases were necessary to contain inflation completely.

Additionally, escalating concerns about a deepening global economic slowdown may temper any market exuberance. As a result, the Dollar may get some support, and the AUD/USD pair may remain under control, at least temporarily. The publication of the US Weekly Initial Jobless Claims traders currently anticipates data.


This will affect the USD price dynamics and give the AUD/USD pair some momentum, along with the US bond rates. In addition, the general risk attitude may help provide short-term chances ahead of the publication of the RBA meeting minutes and China’s most recent inflation data on Friday during the Asian session.