AUD/USD stalls intraday uptick ahead of 0.7500 amid resurgent USD demand
- The risk-on mood assisted the perceived riskier aussie to gain traction on Monday.
- Elevated US bond yields revived the USD demand and capped any meaningful gains.
- Investors now await the Australian CPI report and Advanced US GDP for a fresh impetus.
The AUD/USD pair maintained its bid tone through the early North American session and was last seen trading around the 0.7485-90 region, up 0.35% for the day.
The pair attracted fresh buying on the first day of a new trading week amid the dominant risk-on mood in the markets, which tends to benefit the perceived riskier aussie. However, a goodish pickup in the US dollar failed to assist the AUD/USD pair to capitalize on its move or find acceptance above the key 0.7500 psychological mark.
The greenback drew some support from elevated US Treasury bond yields and staged a solid rebound from near one-month lows touched earlier this Monday. In fact, the yield on the benchmark 10-year US government bond held steady above the 1.65% threshold growing acceptance that the Fed will tighten its policy sooner than anticipated.
The Fed Chair Jerome Powell reaffirmed on Friday that the US central bank remains on track to begin rolling back its massive pandemic-era stimulus. The markets have also been pricing in the possibility of a potential interest rate hike in 2022 amid worries that the recent widespread rally in commodity prices will stoke inflation.
This, in turn, was seen as a key factor that kept a lid on any meaningful gains for the AUD/USD pair amid absent relevant market moving economic releases from the US. Investors also refrained from placing aggressive bets, rather preferred to wait on the sidelines ahead of this week's important macro data from Australia and the US.
The quarterly Australian consumer inflation figures are due for release on Wednesday. This, along with the Advance US Q3 GDP report on Thursday, will help determine the next leg of a directional move for the AUD/USD pair. In the meantime, the USD price dynamics and the broader market risk sentiment will be looked upon for some trading impetus.
Technical levels to watch