AUD/USD Sits Near Multi-week Peak, Bulls Await Sustained Strength Beyond 0.6600 Mark

The AUD/USD pair builds on this week’s solid recovery move from the 0.6350 area, or its lowest level since November 2023 and climbs to a two-and-half-week high on Friday. Spot prices now seem to have found acceptance above the very important 200-day Simple Moving Average (SMA), with bulls awaiting a sustained strength beyond the 0.6600 round-figure mark before placing fresh bets. Against the backdrop of hawkish comments from Reserve Bank of Australia (RBA) Governor Michele Bullock, stronger Chinese inflation figures provide an additional lift to the Australian Dollar (AUD). On Thursday, Bullock emphasized the need to stay vigilant about inflation risks and indicated a willingness to hike rates if necessary. Moreover, the National Bureau of Statistics reported this Friday that consumer prices in China rose by 0.5% in July from a year ago as compared to expectations for a print of 0.3%.Additional details revealed that the headline CPI climbed 0.5% in July, the highest since February, overshadowing the fact that the Producer Price Index shrank for a 22nd consecutive month, by 0.8% in July. Nevertheless, the data eased worries about a deeper economic downturn in China, which, along with receding fears of a US recession, boosts investors’ appetite for riskier assets. This, in turn, undermines the safe-haven US Dollar (USD) and contributes to driving flows towards the risk-sensitive Aussie. The Greenback is further weighed down by a fresh leg down in the US Treasury bond yields, triggered by rising bets for bigger interest rate cuts by the Federal Reserve (Fed) in September. In the absence of any relevant market-moving US economic data, the fundamental backdrop supports prospects for a further appreciating move for the AUD/USD pair. Nevertheless, spot prices remain on track to register strong weekly gains for the first time in the previous four as the focus shifts to the US CPI report next Wednesday.More By This Author:Gold Price Consolidates In A Range Amid Mixed Cues, Bias Seems Tilted In Favor Of Bulls AUD/JPY Clings To Hawkish RBA-Inspired Gains, Struggles To Build On Strength Beyond 96.00 USD/CAD Hangs Near Two-Week Low Amid Weaker USD, Sliding Oil Prices Lend Support