September 8, 2022 01:45 AM ET
By: AnalysisWatch
The AUD/USD pair is extending its rebound from its intraday low of 0.6745, down 0.42% intraday ahead of Thursday's European session. In doing so, the Aussie pair is tracking the latest pullback in the U.S. dollar, due to lower yields, while depicting an overall cautious mood in the market ahead of key events, namely the European Central Bank (ECB) monetary policy meeting and Fed Chairman Jerome Powell's speech.
That said, the U.S. Dollar Index (DXY) is down to 109.70 but remains slightly bid while reversing the previous day's pullback from a two-decade high. U.S. 10-year Treasury yields extended Wednesday's decline from their highest levels since mid-June to 3.23%.
RBA Governor Philip Lowe recently rejected plans to unveil the quantitative tightening (QT) program, siding with AUD/USD bears. In a similar vein, he stated, "Further rate hikes will be necessary, but not on a pre-determined path."
Earlier in the day, Australia's trade balance fell to 8,733 million in July from 14,500 million expected by the market and 17,670 million before. Other details suggest that imports jumped 5.2% versus 0.7% previously, while exports fell 9.9% versus 5.1% previously.
It should be noted that negative headlines regarding China are also putting downward pressure on AUD/USD prices. That said, the South China Morning Post (SCMP) previously mentioned that "Shenzhen cuts entry quota for Hong Kong travelers." Subsequently, the Reuters report that Taiwan and the U.S. are moving to strengthen ties is also weighing on sentiment.
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