- US data shows the economy grew at an annualized rate of 6.4% in Q1, beating expectations.
- DXY rises amid higher US yields; 10-year hits 1.68%.
The combination of a deterioration in market sentiment and higher US yields weakened the AUD/USD pair that dropped to 0.7751, hitting a fresh daily low, extending the correction from the six-week high it reached earlier at 0.7817.
The acceleration of the decline in AUD/USD took place amid a sharp slide in Treasuries. The 10-year yield is up 3% after a pullback; it climbed to 1.68% and, as of writing, stands at 1.66%.
Previously, economic data showed the US economy grew at an annualized rate of 6.4% during the first quarter beating expectations. On the negative front, initial jobless claims dropped less-than-expected, and pending home sales in March increased below market consensus. On Friday, in Australia, the producer price index (Q1) is due.
The short-term outlook deteriorated for the aussie over the last hours after being unable to break above 0.7815/20. The mentioned area capped the upside again, like it did on Monday and last week. A firm break higher would clear the way to more gains, targeting the 0.7850 area.
On the flip side, a consolidation below 0.7760 should point to more losses ahead, with a potential test of the weekly low at 0.7720/25, which protects 0.7700.
