AUD/USD Surges Back Above 0.7000, Retail Sales On Tap Today

AUD/USD spiked late in NY trading, as US Fed Chair Powell's press conference was generally interpreted as dovish, which weakened the USD across the board. AUD/USD went from sub 0.6920 to above 0.7000 in short order. We currently track around 0.6995. The currency was supported by a strong risk-on tone in equities, with the VIX dipping back toward recent lows (23.26%).

• On the topside, note the 0.7069 level, which is the June 16th high. Beyond that is 0.7141, the 76.4% retracement of the Jun 3 - Jul 14 downleg. We are above the 50-day MA at 0.6972, while downside support could be evident just under 0.6920.
• The AUD wasn't the best performing G10 currency in the past 24 hours, underperforming the EU bloc, but up against the traditional safe havens. AUD/JPY rose above 95.60, and the July 20 high of 95.75 is now in play. AUD/NZD also rebounded further following the CPI dip, getting close to 1.1200 before settling back at 1.1165 currently.
• US yields were lower, although the curve steepened, while the US real 10yr yield fell to 36bps, lows going back to early June, in a further risk-positive signal for markets.
• Commodities were higher across aggregate indices and base metals. Copper (CMX) rose by over 1.3% to $343, while iron ore has a $113/tonne handle.
• The Australian Treasury is expected to nudge down GDP forecasts for the financial year ended June 30 of this year to 3.75%, versus the previous forecast of 4.25%. The current 2022/23 financial year forecast will be lowered to 3% from 3.5% and 2% for the 2024 fiscal year.
• On the data front, retail sales prints today. The market expects a +0.5% gain, versus +0.9% in May. Also out is Q2 export and import prices.