AUD/USD licks its wounds at seven-week low near 0.6800 on Fed, geopolitical concerns – by anilpanchal7 AUDUSD Politics Fed RiskAppetite Russell
Hawkish Fed Minutes, fears emanating from China, Russia weigh on Aussie pair.Second readings of the US Q4 PCE, GDP will be important ahead of Fed’s preferred inflation gauge.
AUD/USD picks up bids to refresh intraday high around 0.6810 as bears take a breather around the 1.5-month low, after a two-day downtrend, during early Thursday. In doing so, the Aussie pair might have cheered the latest geopolitical hints from US President Joe Biden but the broad pessimism surrounding the Ukraine-Russia war and the Fed’s aggression keeps the Aussie bears hopeful.
That said, President Joe Biden said on Wednesday, in an interview with ABC News, that he did not read into Vladimir Putin's decision to temporarily suspend participation in a nuclear arms treaty as a signal the Russian President was considering using nuclear weapons. US President Biden, however, called it a "big mistake", reported Reuters.
Although the headlines ease the geopolitical fears by a bit, comments from China's top diplomat Wang Yi and Russian President Putin weigh on the sentiment and the risk-barometer AUD/USD pair. China’s Diplomat Wang Yi met Russian President Vladimir Putin and said that they are ready to deepen strategic cooperation with Russia on Wednesday, as reported by Reuters. The Chinese policymaker also added that their relations will not succumb to pressure from third countries.
Elsewhere, hawkish Federal Reserve Minutes and statements suggesting higher interest rates from the Fed also weigh on the AUD/USD. As per the latest Federal Open Market Committee’s Monetary Policy Meeting Minutes, all participants agreed more rate hikes are needed to achieve the inflation target while also favoring further Fed balance sheet reductions.
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