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AUD/USD jumps toward 0.7050 in the Asian session on Tuesday, picking up fresh bids following the Reserve Bank of Australia's (RBA) interest rate hike decision. The RBA said that it remains committed to bringing inflation back to its target, leaving the door open for further rate increases. RBA Governor Bullock's press conference is next in focus.
USD/JPY struggles to capitalize on the overnight bounce from a one-week low, consolidating around 157.50 in the Asian session on Tuesday. Trump's concerns about the Japanese Yen's weakness fueled speculation about another US-Japan joint intervention. This, along with the hawkish BoJ, underpins the JPY and caps the currency pair. Meanwhile, rising Fed rate-hike bets and oil-driven inflation fears continue to push US bond yields to multi-year highs, keeping the US Dollar pinned near a two-month high and supporting the pair.
Gold bounces off eight-week lows at $4,110 early Tuesday, awaiting US JOLTS jobs data. The US Dollar enters bullish consolidation alongside US Treasury yields; Fed rate-hike bets persist. Gold confirms a falling wedge breakdown, while daily RSI stays bearish.
The Fed and the BoJ have just done something remarkably similar. Both central banks raised interest rates by 25 bps last week, both are confronting inflation risks, and both signal that future decisions will depend on incoming economic data.
