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On Tuesday, the brighter market sentiment hurt the USD, which lost ground against its main peers. The Australian dollar, on the other hand, abandoned previous weakness and surged nearly 100 pips in the early US Trading session, reaching above 0.6400. The AUD/USD pair appreciates 1.3% on the day, to erase Monday’s reversal amid a broad US dollar weakness on falling treasury yields.
The negative consumer confidence data in addition to US housing prices, contracting beyond expectations, and the disappointing S&P PMIs released on Monday increased investors’ concerns about the negative impact on the economy of the Fed’ sharp tightening circle.
The markets hope that the US central bank could ease its normalization cycle over the coming months. Stock markets have extended gains after a mixed US session opening and the US Treasury bonds dropped sharply, with the 10-year falling from 4.25% to 4.06 so far.
