Forex
Australian Dollar Rises as US Yields Fall, Carry Trades Gain Favor
US Treasury yields have fallen by around 10-15 basis points since Treasury Secretary Scott Bessent's market intervention, leading to a decrease in volatility across interest rates, FX, and equities.
Oil prices have also eased, with prices down 8% since last week, supporting risk appetite as carry trades remain in favor.
The Australian dollar drew fresh support after July CPI surprised on the upside, lifting expectations of a Reserve Bank of Australia rate hike in November.
A favorable environment is seen for carry trades, with US 10-year Treasury yields having slipped about 15 basis points, pushing FX volatility indexes to multi-month lows.