AUD/USD up 62 pips to 0.7368
I think the better FX trade at the moment is in the yen but AUD/USD is also showing life in another sign that commodity price rises and a better mood around covid is boosting sentiment.
US equity futures had pointed to losses today but the S&P 500 is now up 23 points to 4414. With that, AUD/USD is at the highs of the day and has cut through a minor downtrend dating back to May.
I don't assign much weight to that line but AUD/USD is also at a one-month high and there isn't much standing in the way of a return to 0.7475.
Another positive sign on the fundamental side is the renewed US-China dialogue. I don't it's politically feasible for the US to drop tariffs but at least that's a signal it won't get worse in the near term.
Finally, I'm thinking about how governments are going to deal with high energy prices. For me, the likely path is direct subsidies to consumers. That's another sign that the era of austerity isn't coming back any time soon.
