AUD/USD taps three-year highs on broad US Dollar weakness

💡 DMK Insight

AUD/USD just broke above 0.7000, and here’s why that matters: The RBA’s unexpected rate hike to 3.85% is a game changer, pushing the Aussie dollar to levels not seen in three years. This move not only strengthens the AUD but also signals a shift in monetary policy that traders need to watch closely. With the pair now trading above the psychological barrier of 0.7000, it opens the door for further upside potential, particularly if the U.S. dollar faces headwinds from upcoming economic data or Fed policy shifts. Look for support around 0.6950, which could act as a buffer if profit-taking occurs. But don’t overlook the flip side: if global risk sentiment deteriorates or commodity prices drop, the AUD could quickly reverse. Traders should keep an eye on correlated assets like gold, which often moves with the AUD due to Australia’s status as a major exporter. Watch for any signs of weakness in the U.S. economy, as that could further bolster the AUD in the near term.