AUD/USD pares intraday gains, still comfortable above 0.6900 amid modest USD weakness

 

• AUD/USD staged a modest recovery from a near one-month low, though lacked follow-through.
• The risk-on impulse, retreating US bond yields undermine the USD and extended some support.
• Recession fears kept a lid on the optimistic move in the markets and the risk-sensitive aussie.
• Fed rate hike bets favour the USD bulls and support prospects for further losses for the major.
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The AUD/USD pair struggled to capitalize on its modest recovery gains and has now retreated nearly 40 pips from the daily peak. The pair was last seen hovering near the 0.6930-0.6935 region, up less than 0.15% for the day.

The early optimistic move in the markets ran out of steam amid concerns that a more aggressive policy tightening by major central banks to curb inflation would pose challenges to the global economy. This, in turn, was seen as a key factor that acted as a headwind for the risk-sensitive aussie, though modest US dollar weakness could help limit further losses for the AUD/USD pair, at least for now.