AUD/USD marches towards 0.7120 as DXY eases, the spotlight is on FOMC minutes

• AUD/USD has reclaimed the previous day’s high on the soaring market mood.
• RBA’s Ellis is expecting more rate hikes by the RBA.
• The FOMC minutes will remain the key event to watch out for.

The AUD/USD pair is advancing firmly to re-test its weekly high at 0.7127 as risk-on impulse rebounds and safe-haven assets are losing their traction again. The pair has recovered its entire intraday losses and is expected to display more gains in today’s session.

The aussie dollar has regained strength after Reserve Bank of Australia Assistant Governor (Economic) Luci Ellis bolstered the expectations of more rate hike announcements by the RBA in its upcoming monetary policy. Mounting price pressures are compelling for a rate hike announcement itself in June. He also added that the tightening policy will reduce the imbalance in the demand-supply mechanism. The housing market is at its capacity however global supply chain disruptions and advancing material costs are delaying the project completions and dampening profit margins.

Going forward, the Australian Bureau of Labor Statistics will report the Retail Sales this week. Investors should brace for some pressure on the economic data as it is expected to tumble to 0.9% against the prior print of 1.6%.

Meanwhile, the US dollar index (DXY) has witnessed some offers after failing to surpass the round-level resistance of 102.00. The DXY has continued its vulnerable performance as investors are underpinning the positive market sentiment. In today’s session, the focus will remain on the Federal Open Market Committee (FOMC) minutes, which will dictate the decision-making behind featuring the 50 basis points (bps) interest rate hike decision.