- AUD/USD gained traction for the fourth straight day and climbed to a fresh monthly high.
- Receding bets for a 100 bps Fed rate hike in July weighed on the USD and extended support.
- Elevated US bond yields helped limit the USD losses and kept a lid on any further move up.
The AUD/USD pair built on its recovery move from the 0.6680 region, or over a two-year low touched last week and gained traction for the fourth successive day on Wednesday. Spot prices climbed to a fresh monthly high and held steady above the 0.6900 mark through the early European session.
Investors continued scaling back their expectations for a supersized Fed rate hike after several FOMC members said last week that they will likely stick to a 75 bps increase at the upcoming meeting. This was seen as a key factor behind the recent US dollar corrective pullback from a two-decade high, which, in turn, continued lending support to the AUD/USD pair.
Apart from this, a generally positive tone around the equity markets dragged the safe-haven buck to its lowest level since July 6 and benefitted the risk-sensitive aussie. The unsurprisingly hawkish Reserve Bank of Australia meeting minutes released on Tuesday further underpinned the Australian dollar and provided an additional boost to the AUD/USD pair.