- AUD / USD is struggling to capitalize on its modest gains to multi-day highs.
- A combination of factors helps revive demand for the USD and puts pressure on the pair.
- The market focus now shifts to the RBA’s monetary policy decision on Tuesday.
The pair AUD/USD has returned its modest intraday gains and has moved towards the zone of daily lows, just above 0.7250, at the start of the European session on Monday.
The pair has moved higher during the early part of the trading action on Monday, although the rally has lacked bullish conviction and has lost steam near the 0.7280-85 region. A combination of factors has helped reignite demand for the US dollar. This, coupled with a shift in global risk sentiment, has limited the rise in the perceived riskier Australian dollar.
Investors seem convinced that the Fed would begin reversing its massive pandemic-era stimulus as early as November and raising interest rates in 2022. Aside from this, a modest rally in US Treasury yields has acted as a tailwind for the USD, which further benefited from a weaker tone around equity markets.
The renewed Concerns About Evergrande Group’s Debt Crisis in China have weighed on investors’ appetite for assets may perceived risk. In the latest development, the debt-ridden Chinese company will sell a 51% stake in the real estate unit for more than $ 5.1 billion to Hong Kong’s Hopson Development, though the news has done little to calm sentiment.
Looking ahead, there is no major economic data release from the United States on Monday. Therefore, US bond yields will play a key role in influencing price dynamics around the USD. Aside from this, broader market risk sentiment could provide some boost to the AUD / USD pair ahead of the RBA’s monetary policy decision on Tuesday.
AUD / USD technical levels
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