- AUD/USD grinds near intraday high after rising the most in a month, snapping two-day downtrend.
- Risk-on mood, PBoC inaction and hopes of hawkish RBA Minutes underpin Aussie pair’s run-up.
- Hopes of avoiding US default, softer US data favor sentiment and weigh on US Dollar of late.
- RBA Minutes, China/US Retail Sales eyed for immediate directions but US debt ceiling talks are the key.
AUD/USD grinds near 0.6700 as the bulls await the Reserve Bank of Australia (RBA) Meeting Minutes on early Tuesday. In doing so, the Aussie pair also benefits from the market’s cautious optimism due to the US debt ceiling hopes, as well as upbeat signals from the People’s Bank of China (PBOC) and likely hawkish statements from the RBA.
It’s worth noting that the Aussie pair rose the most in one month the previous day while printing the first daily gains in three amid broad US Dollar weakness, mainly due to the market’s hopes of overcoming the US default and downbeat US data.
On Monday, the largest fall in the US NY Empire State Manufacturing Index since April 2020, to -31.8 for May, joined mixed Fed talks to also weigh on the US Dollar. That said, Atlanta Fed President Raphael Bostic told CNBC on Monday that there is still a long distance to go on inflation and added that they may have to "go up on rates," as reported by Reuters. Bostic further noted that he will not be looking at cutting rates until well into 2024 in his baseline scenario. On the contrary, Chicago Federal Reserve Bank President Austan Goolsbee said in an interview with CNBC on Monday that a lot of impact of rate hikes is still in the pipeline. Furthermore, Minneapolis Fed President Neel Kashkari stated that signaled that the Fed has a long way to go to get inflation to 2.0%.
Elsewhere, the White House announced a meeting between President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy to overcome the looming US default. Ahead of the event, the US policymakers appear somewhat optimistic about extending the debt ceiling limit before the June expiry.
People's Bank of China (PBOC) keeps the one-year Medium-term Lending Facility (MLF) rates unchanged at 2.75%, per the latest update. The news joins the PBOC’s highest daily USD/CNY fix since March 10 to propel the AUD/USD price. Additionally, the Chinese central bank also released its quarterly economic report stating that China's economy isn’t experiencing deflation and that economic growth is set to rebound sharply.
Moving on, the RBA Minutes need to defend its latest hawkish surprise to keep the AUD/USD bulls on the table. That said, the latest quarterly Statement of Monetary Policy (SoMP) from the Aussie central bank isn’t too impressive and hence risks of a pullback on the event can’t be ruled out.
Additionally, China’s Retail Sales and Industrial Production for April, as well as the US Retail Sales for the said month, will precede the US debt ceiling talks, scheduled for 19:00 GMT, to direct short-term AUD/USD moves.
Technical analysis
A clear bounce off the 12-day-old ascending support line directs AUD/USD bulls toward the 200-DMA hurdle of around 0.6720.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retests daily lows near 1.0850 on softer US PPI
EUR/USD remains on the defensive against the backdrop of another positive day in the US Dollar, always amid intense tariff jitters and weaker-than-expected US Producer Prices in February.
Gold looks bid and trades close to $2,950
Gold extends its winning streak, moving toward the $2,950 mark after notching gains over the past two sessions. Heightened fears of an economic downturn, spurred by escalating trade tensions, have fueled a risk-off environment—further boosting the allure of the precious metal as a safe-haven asset.
GBP/USD remains offered near 1.2940 on USD buying
The continuation of the buying interest in the Greenback keeps the risk complex under pressure, motivating GBP/USD to recede to the 1.2940 region and reverse two consecutive days of gains for the time being.
Metaverse narrative stalls as price action fades, but on-chain data signals continuing accumulation
Metaverse tokens are cryptocurrencies associated with virtual worlds, digital economies, and immersive online experiences. Tokens like Sandbox, Decentraland, and Axie Infinity, three of the most prominent assets during the Metaverse boom of 2021, continue to face correction since they topped in early December.
Brexit revisited: Why closer UK-EU ties won’t lessen Britain’s squeezed public finances
The UK government desperately needs higher economic growth as it grapples with spending cuts and potential tax rises later this year. A reset of UK-EU economic ties would help, and sweeping changes are becoming more likely.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.