AUD/USD surrenders intraday gains as DXY strengthens on the aggressive hawkish roadmap by the Fed

• AUD/USD has failed to sustain above 0.7400 as DXY strengthens on hawkish Fed.
• The rising odds of a 50 bps interest rate hike by the Fed have weighed down the antipodean.
• Goldman Sachs sees Fed’s interest rates to 2% by the end of 2022.

The AUD/USD pair has witnessed a steep fall after failing to sustain above 0.7400 as the Federal Reserve (Fed) put forward an aggressive hawkish roadmap for 2022 to contain the soaring inflation.

The Fed has announced ‘loud and clear that six more interest rate hikes are on the cards this year. To tame the galloping inflation, interest rate elevation is the last resort. Over that, the CME’s FedWatch Tool has displayed 60% odds for a 50 basis point (bps) interest rate hike in May’s Federal Open Market Committee (FOMC).

Meanwhile, Goldman Sachs said that they now see “two 50 basis point hikes starting with the next meeting (May and June), followed by four 25 basis point hikes into the end of the year.” Also, Goldman Sachs sees rate hikes to 2% by the end of 2022.

The US dollar index (DXY) is performing strongly on Tuesday as the index has surged 0.36%. The DXY has witnessed some significant bids after surpassing 98.00 from where it felt resistance multiple times. While, the 10-year US Treasury yields are comfortably trading near 2.33%, at the press time.

The speech from Reserve Bank of Australia (RBA)’s Governor Philip Lowe has failed to strengthen the antipodean as the administration needs more proof of widespread price pressures to turn for policy tightening.

The speech from Fed’s Chair Jerome Powell on Wednesday will remain a major event this week as it will provide insights for the likely monetary policy action in May.