The hawkish RBA minutes only added fuel to the fire. However, to a certain extent, the minutes are being dwarfed by the health care story, which is moving the FX markets as of now.
Aussie bond yields drop
The minutes may sound hawkish, although the Aussie bond yields are not impressed. The 10-year yield is down close to two basis points at 2.714%. Meanwhile, its counterpart is relatively strong, down less than one basis point at 2.3%.
Nevertheless, concerns that Trump would have a hard time pushing through the tax/fiscal reforms are forcing investors to move out of the US dollar.
AUD/USD Technical Levels
An end of the day close above 0.7831 (23.6% Fib R of 2011 high - 2016 low) would open door for a more sustainable rally towards 0.7938 (Mar 2015 high) and 0.80 (zero levels). On the downside, failure to hold above 0.78 (zero levels) could yield a pullback to 0.7773 (5-DMA) and 0.7740 (July 13 high).
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