- The AUD/USD pair extends its bullish trajectory for the third consecutive day and surpasses the 200-day moving average to trade around 0.6594.
- The fall of the Two Dollar is due to the decline in US Treasury yields and speculation about the direction of the Fed’s monetary policy.
- US new home sales data for October shows a decline, contributing to AUD/USD’s brief pullback below the 0.6600 level.
AUD/USD extends its gains to three consecutive days and breaks the 200-day moving average (DMA) of 0.6583, rising 0.21%, after bouncing from daily lows observed around 0.6567. The weakening of the US Dollar (USD) due to falling US bond yields sponsored the Australian Dollar (AUD)’s more than 4% rally last month. At the time of writing, the pair is trading at 0.6594.
AUD/USD hits three-month highs as RBA rate hike estimates for next year exceed 80%
Market sentiment remains mixed, a headwind for AUD/USD, which has so far remained in positive territory due to the bears’ failure to drag prices towards the 200-DMA. Speculation that the US Federal Reserve (Fed) has ended its tightening cycle continues to drive broader dollar weakness. As a result, US Treasury yields remained depressed. For example, the benchmark 10-year yield fell 55 basis points to 4.414%, after reaching a yearly high of 5.02%.
Financial conditions had therefore eased, which is not good news for the Fed. Some US central bankers suggested that the reasons for the last two decisions to keep rates unchanged were high US bond yields.
In terms of data, the US economic calendar revealed that new home sales plummeted in October by 5.6% year-on-year, standing at 0.679 million, below forecasts of 0.725 million, as revealed by the US Census Bureau. The figures supported a miniscule recovery for the Dollar, as AUD/USD fell below 0.6600 after reaching a 3-month high of 0.6614.
In Australia, the economic agenda was limited, although operators are awaiting the publication of the Consumer Price Index (CPI) on Wednesday. Analysts estimate that the CPI fell to 5.2%. Regarding central banks, Reserve Bank of Australia (RBA) Governor Michele Bullock maintained her hawkish stance, although Markets see a 15% chance of the RBA raising rates in December, The probabilities of another increase in early 2024 stood at 88%.
AUD/USD technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
