AUD/USD

The 0.7000 level is now the battleground — a June jobs beat has the RBA firmly back in hiking mode, but rising US 10-year yields at 4.70% (18-month highs) and a 25% FOMC hike probability cap Aussie upside near term.

AUD/USD has reclaimed the key 0.7000 round-number level, supported by a blowout June Australian employment print (+76,300 vs. +15,300 forecast) that has re-priced RBA rate-hike expectations higher.

Main Risk

Fed hawkishness / elevated US 10-year Treasury yields

NY Fed President Williams flagged persistently high inflation, and swaps price a 25% chance of a +25bp hike at the July 28-29 FOMC meeting, which would lift the USD and pressure AUD/USD back below 0.6975.