US equity markets are storming higher at the open after a lower-than-expected CPI reading and risk trades are surging. One of them is AUD/USD, which is up 89 0pips to 0.7053. That breaks the July 31 high and is the best since June 15.

It's part of a broad slump in the US dollar but AUD and NZD are the two best-performing major currencies today. That's an indication of better sentiment on global growth and diminishing fears about rate hikes.

Next for AUD/USD is 0.7069, which was the June 15 high. The peak so far today is just two pips short of that an it highlights how that's an important level.

AUDUSD daily Aug 10

Aside from the technicals, the path from here will depend on risk sentiment. The CPI undershoot is positive news but many have been anticipating it due to falling gasoline prices and debottlenecking of the global supply chain.

Ultimately, AUD will need to see better signs of global growth in the months ahead. Much of that will depend on how China copes with covid and how Europe copes with the energy shock.