AUD/USD fell 0.17% to 0.6971 as rising US inflation expectations and higher Treasury yields dampened sentiment for the risk-sensitive currency.
The AUD/USD pair faced downward pressure, closing with a 0.17% loss as hot US inflation data fueled expectations of a Federal Reserve rate hike. This shift in monetary policy outlook drove US Treasury yields higher, weakening the Australian Dollar against the greenback and pushing the pair below the 0.7000 psychological level to 0.6971.
The pair ended the session with a 0.17% loss at 0.6971.
Rising US inflation data increased expectations for a Federal Reserve rate hike, which pushed US yields higher and strengthened the USD.
The Australian Dollar retreated against the greenback on Wednesday as hotter-than-expected US inflation data pushed Treasury yields higher. Markets are now pricing in a more aggressive Federal Reserve stance, pressuring the Aussie below the 0.7000 psychological threshold.
The AUD/USD is declining because higher-than-anticipated US inflation data has increased expectations for Federal Reserve interest rate hikes, which in turn drives up US Treasury yields and strengthens the US Dollar.