FX

AUD/USD retreats from 0.7520 as US T-bond yields rise

  • AUD/USD shed 30 pips in the last hour, as US T-bond yields rise amid risk-on market mood.
  • Broad US Dollar strength across the board weighs on the AUD/USD pair.
  • US Consumer Confidence rose more than expected by economists, the AUD/USD barely moved.

The AUD/USD barely advances during the New York session, is up 0.08%, trading at 0.7497 at the time of writing. Earlier in the day, the pair dipped to 0.7483, yet bounced off the daily lows to print a daily high at 0.7524, finally settling at current levels.

The market sentiment is upbeat due to robust US Q3 corporate earnings, with almost 81% of the S&P 500 companies reporting earnings, beating expectations. Additional factors like inflationary pressures and tightening monetary policy conditions remain in the backseat.

However, in the last hour, rising US T-bond yields seem to change the tone of risk-sensitive currencies, like the aussie dollar. The US 10-year Treasury yield is advancing 0.07%, sitting at 1.636%, putting a lid on the AUD/USD pair upbreak move above 0.7500. Also, the US Dollar Index reclaims the 94.00 level, up 0.18%, at press time. 

US mixed macroeconomic, ignored by AUD/USD traders

The US economic docket unveiled the US Housing Price Index for August (MoM) reading which rose by 1%, lower than the 1.3% foreseen. Further, the S&P/Case-Shiller Home Price Indices (YoY) expanded by 19.7% less than the 20.1% expected.

Further, US New Home Sales for September increased by 0.8M, better than the 0.76M estimated by analysts. The US Consumer Confidence for October improved to 113.8 versus 108.3 expected.

The AUD/USD pair reaction was muted, but as US T-bond yields started to rise, the pair shed 30 pips, trading at current levels.

Next ahead on the Australian economic docket, the RBA Trimmed Mean CPI for the Q3 is expected at 0.5%, while the Consumer Price Index for the same period is estimated to increase by 0.8%.

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