AUD/USD perks up and takes on fresh corrective highs

AUD/USD is rallying in Tokyo, making fresh highs of 0.6691 after perking up from the 0.6660s. Markets are jittery ahead of next week´s Federal Reserve meeting. Overnight, the European Central Bank lifted rates that provoked a sell-off in Euro on the knee-jerk that later recovered and continued to press against resistance. 

Markets are choppy surrounding the banking crisis but there is an undertone of risk on that is feeding into Friday´s markets whereby global equities rose on Thursday on news that a large group of banks were infusing cash into US lender First Republic Bank. Also, the Swiss National Bank came to the rescue of Credit Suisse which has also eased fears of a global contagion.

Meanwhile, a 25-basis-point rate hike by the Federal Reserve is being priced in for next week despite the 50 basis points hike from the ECB.  ECB President Christine Lagarde described the central bank's rate rise on Thursday, which took its key rate to 3%, as a "robust decision". 

´´While the Fed is likely to continue the hiking cycle to address inflation, if needed, it could slow down or temporarily suspend its current balance sheet reduction schedule, as it is doing more or less the opposite of the new bank term funding program,´´ analysts at Rabobank argued. 

as for the Reserve Bank of Australia, the markets have almost priced out the chance of the central bank lifting its 3.6% cash rate at its April meeting although the general consensus is that the RBA will hike at least once more given the labor market remains tight.