AUD/USD jumps to 0.7000 neighbourhood, multi-day high amid weaker USD/risk-on impulse

The AUD/USD pair climbs to a four-day high during the early North American session, with bulls now eyeing a move towards reclaiming the 0.7000 psychological mark.

The US dollar meets with a fresh supply on the first day of a new week and erodes a part of Friday's post-NFP strong gains, which, in turn, acts as a tailwind for the AUD/USD pair. The USD weakness could be attributed to a fresh leg down in the US Treasury bond yields. Apart from this, the risk-on impulse further seems to undermine the safe-haven greenback and benefit the risk-sensitive aussie.

That said, growing worries about a global economic downturn, along with the US-China tensions over Taiwan, could keep a lid on any optimistic move in the markets. Furthermore, speculations for a larger Fed rate hike move in September should act as a tailwind for the US bond yields and lend support to the USD. This, in turn, could cap any meaningful upside for the AUD/USD pair, at least for now.

Investors might also prefer to move on the sidelines ahead of the latest US consumer inflation figures, scheduled for release on Wednesday. Against the backdrop of the upbeat US monthly jobs report, a stronger CPI print would reaffirm hawkish Fed expectations and provide a fresh lift to the USD. The fundamental backdrop warrants caution before placing aggressive bullish bets around the AUD/USD pair.

In the meantime, the US bond yields would play a key role in influencing the USD price dynamics amid absent relevant market-moving economic releases on Monday. Apart from this, traders would take cues from the broader market risk sentiment to grab short-term opportunities around the AUD/USD pair.

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