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AUD/USD edges higher as risk sentiment improves, but oil drag caps gains
AUD/USD has risen over two days on a softer US Dollar and firmer risk appetite, while falling oil prices weaken some Australia-specific supports.
Action Forex reports that AUD/USD has staged a rally over the past two days, supported by improving global risk sentiment, a softer US Dollar, and surging industrial commodity prices.
The outlet says the pair has nonetheless moved with surprising restraint versus broader risk assets. Wall Street pushed to fresh record highs, Asian equities rebounded, and copper hit new record levels, but AUD/USD has only edged toward resistance rather than breaking decisively higher.
Action Forex attributes the slowdown in part to the same geopolitical driver working in opposite directions. Optimism that the Strait of Hormuz could reopen is boosting risk sentiment, but it is also weighing on oil prices, which undermines two Australia fundamental supports.
The report adds that copper strength is typically a tailwind for the Australian Dollar because it matters for Australia’s terms of trade, while the US Dollar has weakened as markets scaled back expectations for further Federal Reserve tightening, including a higher probability of a September hold. Lower Treasury yields have also weighed on the Dollar, yet the oil-related headwind is helping explain why AUD/USD has lagged the broader risk momentum.
Latest closeCopper $6.632 ▲1.8%