Aussie Rallies to Multi-Month Highs as Yen Strength Softens Dollar

AUD/USD is trading at its highest level since early May, breaking above 0.7200 and reaching multi-month highs.

The yen's continued rally has helped soften the US dollar, amplifying the Aussie's upside response and making it more responsive to minor pullbacks in US yields and subsequent improvements in risk appetite.

Despite hawkish RBA pricing and continued weakness in the US dollar, particularly against Asian currency names, the key event for AUD/USD this week is the upcoming US CPI data on Thursday, which could determine whether the Aussie's break higher morphs into a breakout or an abrupt reversal.