AUD/USD hovers near the lows as the aussie continues to struggle
This despite the improved sentiment in the market as risk-off tones are easing slightly. AUD/USD currently trades at 0.7259 hovering near the lows for the day of 0.7253 and sits nearby barrier options at the 0.7250 level. Option-related bids aside, the aussie just can't catch a break it seems.
The better tone in markets today has helped to lift most risk assets but the aussie is not among them. Australia 3-year yields continue to fall despite the positivity and at the low today traded to levels last seen in December last year:
And that only adds to the headwinds faced by the aussie as the near-term chart above also shows that it is unable to break the short-term trendline that was formed since yesterday. The struggle is real.
Add to the fact that yields spread between Australia and US 10-year bonds have widened further in the US' favour, it's really difficult to find a reason to back the aussie right now:
The spread yesterday was at 29.8 bps and it currently sits at 31.9 bps in favour of the US, inching towards the year's low (if you're looking from an aussie perspective).
With the RBA not likely to provide any fundamental support either, the AUD's plight looks set to deepen further. If something can't rally on good news (better risk sentiment), then there's only one other way it will go.
