- The AUD/USD pair continued its strong rally, reaching its highest level since June 3rd this year, jumping to a high of 0.7170, up sharply from the June low of 0.6870. This rally coincided with the broader US dollar sell-off that happened as the public debt soared to a record high of $40 trillion.
- The AUD/USD pair rallied for eight consecutive weeks, marking its best run since December 2020, and completed the eight-week rally with a 0.8% gain on Friday.
- On Monday, the AUD/USD consolidated just under a new 2 ½ month high after last Friday's gains.
- The pair is now near 0.7170, with bulls eyeing the 0.7180/0.7200 barriers as potential targets.
- The US dollar dropped to its lowest level in months, with the DXY Index falling to 98.56, its lowest since May 11 this year, amid rising concerns about the US economy.
- The US debt has jumped to a record high of over $40 trillion, pushing yields to their highest level in nearly two decades, complicating the Federal Reserve's efforts to manage the situation.
- Australia's bond yields have also continued rising this year, with the 30-year yield reaching 5.60%, its highest level in over a decade.
- Despite a report showing that the Australian economy lost over 15,000 jobs last month, the RBA is expected to maintain interest rates unchanged this year as inflation has softened.
- Key macro data to watch this week includes the US Personal Consumption Expenditures (PCE) report, which is set to be released on Thursday.
The AUD/USD pair has extended its rally, reaching an 11-week high of 0.7170, marking its best performance since June 3rd.1234
This surge is attributed to a significant drop in the US dollar, which fell to its lowest level in months, with the DXY Index at 98.56, down 3.18% from its year-to-date high of 101.80.5
The US public debt has soared to a record high of over $40 trillion, contributing to rising economic concerns and pushing yields to their highest levels in nearly two decades.6
Despite a report indicating a softening Australian economy, with over 15,000 jobs lost last month, the Australian dollar has rallied for eight consecutive weeks, its best run since December 2020.8
Traders are now eyeing the 0.7180/0.7200 barriers, with expectations of a firm break signaling bullish continuation towards the key barrier at 0.7277, the highest in four years.
The upcoming RBA minutes and US PCE data are anticipated to provide fresh signals for market movements.
Australia’s bond yields have also risen, with the 30-year yield reaching 5.60%, its highest in over a decade, indicating a broader trend in the financial landscape.7
As the AUD/USD pair continues to gain momentum, the market remains focused on potential catalysts that could influence its trajectory in the coming days.
“The US dollar's decline is tied to record public debt surpassing $40 trillion, pushing yields to near two-decade highs. Meanwhile, Australia's 30-year bond yield hit 5.60%, its highest in over a decade, as traders await RBA minutes and US PCE data for fresh signals.”
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