The AUD/USD pair has been trending upward, gaining traction in the early part of the European session on Tuesday. The pair currently trades around the 0.6735-0.6740 area, up almost 0.60% for the day. The bullish trend of the pair is supported by a mix of factors.
Factors Driving the AUD/USD Pair’s Upward Trend
One of the factors that are driving the AUD/USD pair’s upward trend is the U.S. dollar weakness. The greenback has been under pressure recently as the U.S. Federal Reserve remains committed to keeping interest rates low. This has led to increased demand for riskier assets such as the Australian dollar. Additionally, the Reserve Bank of Australia (RBA) has signaled its intention to maintain its current monetary policy stance, which has helped to boost the AUD.
Another factor that is contributing to the AUD/USD pair’s upward trend is the rise in commodity prices, particularly iron ore. Australia is one of the world’s largest producers of iron ore, and the recent rise in prices has provided support for the Australian economy. This has led to increased demand for the AUD, as investors seek exposure to Australia’s commodity-driven economy.
Furthermore, the ongoing trade tensions between the U.S. and China have also had an impact on the AUD/USD pair’s trend. The Australian economy is heavily dependent on trade with China, and any positive developments in the U.S.-China trade negotiations have the potential to boost the AUD.
Conclusion
In conclusion, the AUD/USD pair’s upward trend is being driven by multiple factors. The weakness of the U.S. dollar, the rise in commodity prices, and the ongoing trade tensions between the U.S. and China are all contributing to the bullish trend of the pair. As always, traders should remain vigilant and monitor any developments that could impact the trend of the AUD/USD pair.
