Title: AUD/USD sticks to intraday gains near 0.6700 mark amid broad-based USD weakness
November 29, 2022 2:00 AM ET
The AUD/USD pair was bought near the 0.6640 level on Tuesday and remains in an uptrend until early European trading.
Positive intraday movement lifts spot prices back above the 0.6700 level and is supported by the emergence of fresh US dollar selling.
A combination of factors is not helping the greenback capitalize on the overnight recovery from the very important 200-day Simple Moving Average (SMA) line and is providing some support to the AUD/USD pair. The dovish assessment of the November FOMC meeting minutes released last week cemented market bets on a relatively smaller 50 basis point rate hike in December.
This, along with a modest rebound in global risk sentiment, is weakening the safe-haven USD and favoring the risk-sensitive Aussie.
However, the worsening COVID-19 situation in China is likely to curb any optimism in the markets and create headwinds for the China-derived Australian dollar. Indeed, China reported another record number of COVID-19 infections on Monday, and the imposition of new restrictions sparked a wave of protests in several cities. This adds to fears of a further slowdown in economic activity and could further weigh on market sentiment.
Nevertheless, the AUD/USD pair seems to have ended its two-day losing streak for the time being and remains at the mercy of the USD rate dynamics. Market participants now expect the release of the Conference Board's US consumer confidence index to provide some impetus during the early North American trading session. However, the main focus will remain on Fed Chairman Jerome Powell's speech on Wednesday and this week's important U.S. economic data, including the NFP report on Friday.