- AUD/USD recovered some ground on Tuesday and is now testing the 0.7150 level.
- The pair is getting a boost as risk appetite improves by easing geopolitical tensions, having shrugged off dovish RBA minutes.
The dovish tone of Tuesday’s RBA minutes release, which confirmed the view taken at the last policy meeting that the central bank is in no hurry to start tightening monetary policy settings, has failed to deter the greenback. Australian. In fact, the AUD/USD has been trading with a positive bias on Tuesday having found good buying interest following the drop towards the 0.7100 level, though for now the pair remains capped by resistance at the 0.7150 area. It currently trades at 0.7140, up roughly 0.25% on the day, making the Australian dollar the second best performing G10 currency on the day after the euro.
Risk appetite has improved on Tuesday with Russian government officials, including President Vladimir Putin, confirming that troops will be partially withdrawn from the Ukrainian border. Geopolitical tensions remain high and the risk of a new conflict between Russia and Ukraine is high, but overall risk-sensitive assets have been performing well, which explains in part the strength of the AUD. The latest much better than expected US producer price inflation figures, while reinforcing the argument that the Fed’s most aggressive members called for a 50bp hike in March, did not weigh on markets much. currency.
Looking ahead, AUD/USD will continue to focus on geopolitical developments amid risks of escalating tensions between Russia and Ukraine over the separation of the eastern provinces from the latter. Otherwise, there will also be plenty of US/Aussie data releases for traders to sink their teeth into. US Retail Sales and Fed Minutes due Wednesday, Australian jobs data, US weekly jobless claims and Philadelphia Fed survey data plus speech from the Fed on Thursday and another barrage of statements from the Fed on Friday.
Technical levels
Source: Fx Street
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