- AUD/USD is seen oscillating in a narrow trading band around the 0.6900 round figure.
- An uptick in the US bond yields helps revive the USD demand and acts as a headwind.
- Bets for less aggressive Fed rate hikes cap the buck and lend some support to the pair.
The AUD/USD pair lacks any directional bias on Tuesday and consolidates its recent gains to the highest level since late August, around mid-0.6900s touched the previous day. Spot prices seesaw between tepid gains/minor losses through the first half of the European session and now seem to have stabilized near the 0.6900 mark.
A combination of factors assists the US Dollar to stall its recent downfall and regain some positive traction, which, in turn, is seen acting as a headwind for the AUD/USD pair. A modest uptick in the US Treasury bond yields helps revive the USD demand. Apart from this, the prevalent cautious market mood further underpins the safe-haven greenback and caps the upside for the risk-sensitive Aussie.
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