AUD/USD Eyes 2022 Highs Ahead of Crucial US Inflation Data
The Australian dollar is poised to reach its 2022 highs ahead of crucial US inflation data and Treasury yields. This week's Consumer Price Index (CPI) and Producer Price Index (PPI) figures will be closely watched, as they impact the Federal Reserve's decision on interest rates. The latest Nonfarm Payrolls report has increased the chances of a September rate hike, with Fed funds futures now above 60% probability.
The Australian dollar has remained above 72c and within reach of its 2022 highs, despite the renewed risk of a US rate hike. Traders are cautious ahead of this week's data releases, with attention shifting to comments from Reserve Bank of Australia officials on Tuesday. They are expected to retain a slightly hawkish tone without committing to more action.
AUD/USD correlation analysis shows that USD direction is the dominant near-term driver for the Australian dollar. The yuan remains the most consistent positive relationship, while risk and commodity correlations have surged recently. This suggests AUD/USD is currently trading with a strong risk-on/commodity beta.