The Australian Dollar collapsed by over 1.20% on Tuesday as risk aversion favoured flows into the Greenback amid expectations of higher US interest rates, while the Aussie fell. The AUD/USD trades at 0.6915 after dropping from daily highs of 0.7005.
OCBC’s Sim Moh Siong notes the Dollar is supported by higher US Treasury yields and a more hawkish Federal Reserve path, with leaner Fed communication likely to lift FX volatility.
The British Pound (GBP) pares Monday’s gains against the Japanese Yen (JPY) on Tuesday, weighed down by higher intervention risks and downbeat UK business activity figures.