**AUD/USD Surges Past 0.6700 as US Dollar Weakens: Market Outlook and Economic Data Preview**
*Adapted, expanded, and credited to Scott Smith, VT Markets*
The Australian dollar (AUD) has demonstrated notable strength against the US dollar (USD), with the AUD/USD currency pair pushing past the 0.6700 level. This recent movement aligns closely with a softening greenback and builds anticipation in global markets as key Australian and US economic data releases loom.
This article expands on the report by Scott Smith at VT Markets, exploring the driving forces behind the AUD’s rally, analyzing influences from both economies, and considering potential trajectories for the currency pair. It further incorporates insights from reputable sources such as Reuters and Investing.com to provide a comprehensive outlook.
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### 1. **Recent Performance of AUD/USD**
– **Key Breakthrough:**
The AUD/USD advanced past the psychologically significant 0.6700 threshold, reaching near monthly highs in early trading sessions.
– **Short-term Momentum:**
Technical charts suggest that the pair is in a near-term uptrend, with buyers in control and upward momentum supported by fundamental tailwinds at present.
– **Historical Context:**
The 0.6700 level serves as a key resistance point that, once surpassed, can shift short-term bias toward further gains if bullish momentum sustains.
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### 2. **US Dollar Weakness: Underlying Causes**
– **Federal Reserve Outlook:**
– The Federal Reserve’s recent rhetoric, in particular dovish comments from Chair Jerome Powell, signals a patient stance regarding further rate hikes.
– Market expectations now lean more toward the possibility of interest rate cuts later this year, dampening demand for the USD.
– **US Economic Data Softness:**
– Recent releases, including softer-than-expected US labor market reports and moderating inflation numbers, suggest waning economic momentum.
– Retail sales, jobless claims, and GDP growth have provided little support to the greenback, contributing to its broad-based decline.
– **Yield Dynamics:**
– US Treasury yields have retreated from recent highs, decreasing the yield advantage of USD-denominated assets in comparison to their global peers.
– **Global Market Risk Appetite:**
– An improved risk sentiment, visible in strong global equity markets, has reduced demand for the safe-haven US dollar as investors pivot toward riskier assets, including the Australian dollar.
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### 3. **Australian Dollar Drivers: Domestic and External Factors**
– **Upcoming Domestic Data:**
– Traders and investors await Australian labor market releases, GDP data, and trade figures, all of which have the potential to influence Reserve Bank of Australia (RBA) policy expectations.
– Robust employment growth or an uptick in wage inflation could reinforce a hawkish stance from the RBA.
– **Chinese Economic Developments:**
– As China is Australia’s largest trading partner, the ongoing stabilization and measured
Read more on AUD/USD trading.