AUD/USD Gets Support Close to 0.7300 Benchmarks as President Vladimir Putin Makes Comment
Recovery Despite Struggles
The AUD/USD currency pair has recovered a few points from its daily low in the vicinity of the 0.7300 benchmarks it reached, and it was seen in the regions of 0.7325, trading positively.
There was a stiff struggle by the pair to capitalize on the gains it recorded in the course of the past two trading sessions as it saw some selling early on Friday as a reaction to dovish comments made by the Reserve Bank of Australia’s governor Philip Lowe.
AUD/USD price chart. Source TradingView
In his opening remarks at the Australian Banking Association meeting, Governor Lowe mentioned that the Reserve Bank of Australia would not be under any pressure from money markets to raise the country’s interest rates till commodity prices are increasing at a sustainable rate.
Safe-Haven Dollar Pressures
Aside from that, a couple of intraday US dollar purchases put more downside pressure on the AUD/USD currency pair. With that in mind, the hopes for a diplomatic resolution of the Russia-Ukraine crisis pushed up the global risk sentiment and became a headwind in favor of the US dollar for its safe-haven status. The optimism for a diplomatic resolution was encouraged by Russian President Vladimir Putin when he said there were some positive moves in the ongoing talks with Ukraine.
The most recent events created an excellent move upward in the stock markets that went further to prolong a measure of support to the Australian dollar that is perceived to be riskier. The market’s risk-on pulse, as well as solid expectations of the coming monetary policy tightening by the Federal Reserve, has pushed the American Treasury bond yields to higher levels. This is expected to act as a necessary tailwind to the US dollar and possibly put a lid on further meaningful increases coming for the AUD/USD currency pair.
Therefore, it is considered reasonably prudent for investors to wait a bit for some level of follow-up purchases before confirming a short-term bias for bullish traders in the midst of risks of deeper escalations in the war between Russia and Ukraine. Reports have it that US President Joe Biden is scheduled to call for a total end to any form of trade relationship with Russia any moment from Friday. Leaders of the Group of Seven countries and the European Union are expected to take the same position alongside the US President at different times.