The USD/JPY pair rises to 154.35 during the Asian session as the Yen strengthens against the Dollar for the fourth consecutive session, nearing a 12-week high. This is due to traders unwinding carry trades ahead of the Bank of Japan's expected rate hike and bond purchase tapering. Recent strong US PMI data supports the Federal Reserve's restrictive policy. Investors await US GDP and PCE inflation data, indicating potential volatility ahead of key central bank events.
The AUD/USD is expected to rise due to a softer US Dollar, improved risk sentiment, and the hawkish stance of the RBA, which kept rates at 4.35% and indicated potential near-term hikes. Technically, breaking above 0.6640 could push the pair to 0.6770, despite resistance from the 50, 100, and 200 SMAs on the 4-hour chart and challenges from China's sluggish economy. Key support is at 0.6521.
Despite rebounds in higher beta assets and higher yielding currencies alike, gold prices have maintained their elevation. Stability in the face of adversity bodes well for the future.
With 2019 Fed rate cut odds at their lowest level since May 30, measures of volatility have dropped, and in turn, lower yielding currencies and safe haven assets have suffered.