- AUD/USD capitalizes on currency flows of risk appetite and a broad pullback in the US dollar.
- AUD Tracks More Than 1% Rise in S&P 500 Futures
- The focus is on US inflation, looking for new clues about the Fed’s next move.
The AUD/USD is trading above 0.7000staging an impressive recovery from the 22-month low of 0.6911 hit on Tuesday.
Thus, the pair is up close to 1% on the day, breaking a four-day losing streak.
The recovery of risk appetite in the markets, coupled with a pullback in the US dollar, bodes well for AUD bulls. Better market sentiment, reflected in the more than 1% rise in S&P 500 futures, is helping the US dollar slide.
The investors appear to be taking profits from their bullish USD positions ahead of critical inflation data releases in the US, which is expected to show a spike in inflation in the world’s largest economy. High consumer inflation in the US could lead the Federal Reserve to maintain its outlook on interest rates.
On the other hand, buoyant Chinese inflation is underpinning sentiment around the AUD, although the data failed to move the AUD in an immediate reaction. Chinese CPI for April stood at 2.1% yoy vs. 1.5% priorbeating expectations of 1.8%.
Broad market sentiment will continue to weigh on the AUD ahead of the US inflation release.
AUD/USD technical levels
Source: Fx Street
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