I'm impressed with the rally in risk assets today in spite of rising yields and talk of 50 basis point rate hikes. Obviously that higher path of rates also applies to Australia and that's some of that tailwind today helping to lift the Aussie.
Technical traders are also adding to the momentum on the break above the March 7 high. We're now at the highest levels since November with not much resistance in the way of 0.7550.
The Australian calendar is light in the day ahead but we're starting to see a positive dynamic unfold in risk assets. We're past the 'fear' stage of the Russian invasion and into the 'worry' stage. Markets move on fear, while market participants keep an eye on worrying events. As that fear continues to fade, AUD will be one of the main beneficiaries. There's also a positive seasonal backdrop in April for AUD/USD.
