Australian Dollar climbs as softer US data, improving risk sentiment weigh on USD
AUD/USD trades around 0.7060 on Wednesday at the time of writing, up 0.20% on the day. The pair benefits from broad-based US Dollar (USD) weakness as investors react to softer-than-expected US economic data and improved risk sentiment driven by the latest geopolitical developments.
The Australian Dollar (AUD) gained 0.20% on Wednesday, trading around 0.7060, as investors responded to weaker-than-expected US economic data and improved risk sentiment. The US Dollar Index (DXY) decreased by 0.16% on the day, trading near 99.70. US jobless claims data and Middle East headlines are expected to drive further trading.
Investors in the Australian Dollar (AUD) are closely monitoring the Reserve Bank of Australia (RBA) monetary policy decision on August 11, which is anticipated to be the main driver of the Aussie in the near term. The upside for AUD is currently limited due to reduced expectations of another rate hike by the RBA. The ASX RBA Rate Tracker indicates that the probability of a rate increase has dropped from 43% on July 24 to just 3%.
Analysts at Commerzbank note that AUD/USD has steadily climbed, with the pair rising 50 pips to 0.7050, highlighting the Australian Dollar's positive outlook against the USD. Scotiabank strategists also believe that despite ongoing uncertainty regarding the US/Iran talks and firm oil prices, the broader risk sentiment is favorable, with global stocks mostly higher and high beta FX generally firm.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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