AUD/USD inter-markets: rising in tandem with Copper ahead of this week’s key event risks

The AUD/USD pair extended Friday's recovery momentum from 100-day SMA neighborhood and is now sustaining its move back above 0.7600 handle.

The pair's latest leg of up-move from Friday's swing lows has been primarily led by the ongoing recovery in Copper prices, which is seen benefitting commodity-linked currencies, including Aussie. Moreover, a sideways consolidation, with slight downward bias, in the US and Australian 10-years Treasury bond yields is has failed to provide an direction impetus and the pair remains solely dependent on the price-action surrounding copper prices. 

Meanwhile, a recent rise in the Volatility Index (VIX) and stable expectations of an eventual Fed rate-hike action by the end of this year is extending support to US Dollar and restricting any further appreciating move for the pair. Hence, this week's Fed monetary policy decision on Wednesday would now be looked for further clarity over the timing of next Fed rate-hike decision and eventually determine the pair's near-term trajectory.

In the meantime, being Australia's largest trading partner, Chinese manufacturing PMI prints, slated for release on Tuesday, would derive demand for commodities and eventually provide short-term trading opportunities. Also in focus would be monetary policy decisions from RBA and BOJ, which could contribute towards infusing a fresh bout of volatility in the FX market and determine demand for riskier assets / higher-yielding currencies - like Aussie.

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