Geopolitical tensions drive price pressure which in turn benefits commodities and Antipodeans.
Recent fears of a Russian military invasion of Ukraine have weighed heavily on sentiment.
RBA’s Lowe and US CPI are key events of the week. Risk catalysts remain in control.
The AUD/USD bulls maintain their position at the highest level since November 2021, despite recent fluctuations to 0.7440, as Russia-Ukraine jitters continue to propel commodity prices during Monday’s Asian session.
The risk-barometer pair appears to have lost its identity, rising amid sour sentiment but ignoring the firmer US fundamentals that drive the King dollar.
Beginning with Ukraine, US House Speaker Nancy Pelosi recently stated that the House is “exploring” legislation to prohibit the import of Russian oil.
Fumio Kishida, Japan’s Prime Minister, said that Russia and China are increasing military cooperation. Reuters also joined the news about the further invasion by Moscow towards Kyiv in order to add weight to the sentiment and propel DXY.
Friday’s headline Nonfarm Payrolls rose by 678K. This is well above the median predicted figure of 400K and an upwardly revised 484K. The Unemployment Rate fell to 3.8% from 4.0% in previous readings, and 3.9% as expected. Charles Evans, Chicago Fed President, and FOMC member, stated that the US central bank was on track to raise rates in this year’s data release. However, it might be’more than I believe is necessary to do so at every policy setting meeting.
Moreover, Australia’s ANZ Job Advertisements February rose above -0.3% to 8.4% in February. This support was provided by the AUD/USD bulls.
S&P 500 Futures fell 1.60%, while the US 10-year Treasury yields dropped five basis points (bps), to 1.67%. This reflects the risk-off mood. The mood is also reflected in the negative results of Nikkei225 and ASX200, which lost 3.4% and 1.6% respectively by press time.
In the future, the comments of Philip Lowe the Governor of the RBA and US Consumer Price Index (CPI), February will likely entertain AUD/USD bulls throughout the week. Geopolitical headlines are however more important.
Analyse technique
Trading beyond the 200-DMA (around 0.7320 at the press time) has led AUD/USD buyers to an October 2021 peak around 0.7560.
