- AUD / USD is looking to extend its winning streak by three days.
- Iron ore rally lights up rising US yields and sustains AUD supply.
AUD / USD maintains its recent bullish momentum despite rising US bond yields positively for the greenback.
At press time, the currency pair is best bidding near 0.7270, after printing gains for the third day in a row Thursday. Meanwhile, the yield on the 10-year US Treasury bill is trading at a 2.5-month high near 0.78%, after rising 10 basis points to 0.75% on Thursday.
Rising US rates usually result in bids for the US dollar. However, the AUD / USD pair is currently showing resilience, possibly following the iron ore rally to 6-year highs on Thursday. Iron ore, one of Australia’s top exports, has grown by more than 30% this year with hopes of a recovery in China, the world’s second-largest economy and largest importer of raw materials.
In addition, the Federal Reserve’s latest move to adopt a looser inflation policy could keep the dollar under pressure. Fed Chairman Powell during a speech at the Jackson Hole event Thursday. The central bank will now be more willing to allow inflation to exceed the 2% inflation target before raising interest rates.
However, big gains in AUD / USD could remain if China’s latest ban move Australian firm’s beef imports spark a tit-for-tat reaction from Canberra.