Australian Dollar resumes dominant uptrend against US Dollar
Rising longer-term Treasury yields may slow the Aussie's push
Fed Chair Jerome Powell could be asked on bond improvements
The growth-linked Australian Dollar prolonged gains this past week, even with its most notable advance having happened on Friday. AUD/USD's gain tracked improving market opinion as S&P 500 stocks increased prior to the Wall Street trading session, weakening the haven-linked US Dollar. But, sentiment soured during the main session, pausing the Aussie's progress.
In the week ahead, the Australian financial data docket is rather mild. The most noteworthy events will be private funding expenditures for the fourth quarter and also personal sector credit for January. Although these will provide additional insight into the wellbeing of Australia's economy, the sentiment-linked temperament of this Aussie will likely keep it focused on outside developments and broader fundamental themes.
A good deal of attention has recently been on increasing longer-term Treasury yields out of the world's biggest economy. A combination of vaccine rollouts, financial stimulus expectations and loose monetary policy have already been fueling growth bets in the long run. Additionally, this is consequentially bringing up CPI estimates, together with the 10-year breakeven rate sitting about 2018 highs. The latter is a market-based judge of inflation.
These can provide further insight to the health of the economy. Rosy results may continue fueling growth recovery expectations. While the Aussie could yet benefit from such results, increasing Treasury rates might also work to slow fatigue in america Dollar.
Fed Chair Jerome Powell are also speaking at the central bank's semi-annual monetary policy report to the Senate Banking Committee. He will also be testifying before the Congress House Committee on Financial Services regarding the economy and financial policy. He may receive questions regarding improvements in longer-term fixed-income assets, with the central bank's attention largely geared towards devoting bonds.
