- AUD/USD keeps its range play below 0.7200 amid tepid sentiment.
- US Treasury yields resume the uptrend, fails to lift the greenback.
- Focus shifts to the Australian employment data due on Thursday.
AUD/USD is moving back and forth in a familiar range just below 0.7200, lacking a clear directional bias, as investors remain divided amid a retreat in oil price and the resumption of the rally in the US Treasury yields.
The risk sentiment remains edgy, as investors continue to weigh in aggressive Fed rate hike expectations for the March meeting, which have propelled the US Treasury yields to the highest levels in two years. The benchmark 10-year US rates trade close to 1.90%, up 1.25% so far.
The renewed upside seen in the yields has failed to put a bid under the US dollar, helping keep the aussie afloat. However, with the key Iraq-Turkey oil pipeline resuming at full flow, WTI oil prices correct from seven-year highs of $86.31, capping the upside attempts in the resource-linked AUD.
On the domestic front, the Australian Westpac Consumer Confidence Index dipped to 102.2 in January while New South Wales (NSW) registered a record daily surge in new covid infections.
In the day ahead, while the yields’ price action will dominate the broader market sentiment, investors turn their attention towards the Australian labor market report due Thursday at 0030 GMT. The country’s Unemployment Rate is seen a tad lower at 4.5% in December vs. 4.6% previous. Australia is likely to add 30K jobs in the reported month.
