Certainly! Below is an extended and reworked article based on the topic from Simon Harvey’s piece at FOREX.com, “AUD/USD bounces back ahead of June low to register fresh yearly high” (originally published at Forex.com), enriched with additional information and context sourced from reputable foreign exchange analysis. All credit for the original article content goes to Simon Harvey at FOREX.com.
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## AUD/USD Climbs Toward New Yearly High as Australian Dollar Gains Strength
The Australian Dollar (AUD) recently rebounded sharply against the US Dollar (USD), with the AUD/USD currency pair surging towards a new high for the year. This recovery follows a period in which the currency pair had tested and held support close to the June low. Multiple factors underpin this upward move, ranging from improved risk sentiment globally, expectations regarding central bank interest rate decisions, and resilient Australian economic data. In the following analysis, we will examine the drivers behind the AUD/USD rally, technical levels of interest, and what may lie ahead for traders and investors in the months to come.
### Recent Performance: Key Points
– The AUD/USD exchange rate reversed recent losses and registered a new high for the year.
– The pair bounced higher after testing support near the previous June low.
– Australian macroeconomic resilience, improved risk appetite, and evolving US Federal Reserve policy expectations contributed to this recovery.
– Technical traders are watching critical resistance and support levels as the pair tests fresh 2024 highs.
### Factors Behind the AUD/USD Rebound
#### **1. US Federal Reserve Policy Outlook**
– The US Dollar had previously garnered support from robust domestic growth, a resilient labor market, and sticky inflation which prompted traders to trim their rate cut bets for 2024.
– Recent US economic releases have been mixed, revealing some cooling in inflation and economic activity. This has led markets to reassess the Federal Reserve’s (Fed) likely path.
– Fed officials hinted at patience but implied rate reductions are still possible by year-end if inflation trends lower.
– As rate cut expectations revive, the US Dollar faces renewed downward pressure, which supports AUD/USD.
#### **2. Reserve Bank of Australia (RBA) Rate Stance**
– The Reserve Bank of Australia (RBA) has maintained a hawkish stance, repeatedly warning that further rate hikes are possible if inflation trends fail to fall as desired.
– Australian inflation remains above the RBA’s target, particularly in services and housing-related costs.
– Wage growth in Australia, while receding from its peak, is still relatively firm compared to historical averages.
– Even with weaker-than-expected GDP data recently, resilience in the labor market and sticky prices have kept the RBA from signaling near-term cuts.
– This policy divergence, with the RBA tilting hawkish and the Fed appearing closer to cutting rates, has lent support to the AUD.
#### **3. Resilient Australian Economic Data**
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