AUD/USD extends hawkish RBA minutes-inspired recovery from one-month low By HareshMenghani AUDUSD RBA Inflation Fed Currencies
The pair attracted some buying near the 0.7340 region, or the 50-day SMA support on Tuesday and has now reversed a major part of the overnight slide to a one-month low. The Reserve Bank of Australia, in the minutes of its April board meeting, warned that the rise in inflation has likely brought forward the timing of the first increase in interest rate since 2010.
In fact, the key USD Index shot to its highest level since April 2020 amid expectations that the Fed would tighten its monetary policy at a faster pace to curb the hottest inflation since 1981. Adding to this, St. Louis President James Bullard said on Monday that the US central bank shouldn’t rule out rate increases of 75 bps.
Nevertheless, the AUD/USD pair, for now, seems to have snapped four successive days of the losing streak and remains at the mercy of the USD price dynamics. That said, it will be prudent to wait for strong follow-through selling before confirming that the recent pullback from the 0.7660 area or the YTD peak has run its course and placing aggressive bullish bets.
Traders will further take cues from a scheduled speech by Chicago Fed President Charles Evans, along with the US bond yields, which will drive the USD demand. Apart from this, the broader risk sentiment should allow traders to grab some short-term trading opportunities around