AUD/USD climbs to fresh daily high, around 0.7335 area amid positive risk tone
- AUD/USD attracted some dip-buying on Thursday and turned positive for the second straight day.
- The risk-on impulse in the markets undermined the safe-haven USD and extended some support.
- Traders eye the US CPI report amid hopes for a diplomatic solution to the Russia-Ukraine conflict.
The AUD/USD pair edged higher heading into the European session and climbed to a fresh daily high, around the 0.7330-0.7335 region in the last hour.
Following an early slide to the 0.7290-0.7285 region, the AUD/USD pair attracted some dip-buying on Thursday and turned positive for the second successive day. Hopes for a diplomatic solution to end the war in Ukraine remained supportive of a generally positive around the equity markets. This, in turn, undermined the safe-haven US dollar and acted as a tailwind for the perceived riskier aussie.
The risk sentiment made a solid comeback after Turkey's top diplomat announced that Russian Foreign Minister Sergey Lavrov and his Ukrainian counterpart Dmytro Kuleba have agreed to meet on Thursday. This would be the first potential talk between the two officials since Russian troops invaded Ukraine on February 24 and raised expectations for a compromise, providing much-needed relief to investors.
That said, the risk of a further escalation in tensions between Russian and Western powers could keep a lid on the optimistic move in the markets. Moreover, worries of a major inflationary shock amid the rapidly deteriorating global economic outlook should act as a tailwind for the greenback and cap gains for the AUD/USD pair. Hence, the market focus now shifts to Thursday's release of the latest US CPI report.
The US consumer inflation figures, due later during the early North American session, along with the broader market risk sentiment, might influence the USD price dynamics. Apart from this, traders will take cues from fresh developments surrounding the Russia-Ukraine saga. The combination of factors should further assist traders to grab some short-term opportunities around the AUD/USD pair.
Technical levels to watch