AUD/USD: Early Weakness Puts Multi-Year Bottoms at .6963 and .6921 on Radar

AUD/USD: Early Weakness Puts Multi-Year Bottoms at .6963 and .6921 on Radar

The Australian Dollar is trading at a three-month low early Monday as traders reacted to a more than 1% drop in U.S. stock market futures, sending a clear signal to investors that risk is definitely off. Weighing on the Aussie is an overnight jump in the benchmark 10-year Treasury yield which stood at its highest level since 2018 at 3.1464%.

At 03:08 GMT, the AUD/USD is trading .7022, down 0.0052 or -0.74%. On Friday, the Invesco CurrencyShares Australian Dollar Trust ETF (FXA) settled at $70.25, down $0.25 or -0.35%.

Last week, the U.S. Federal Reserve hiked its benchmark funds rate 50 basis points and Friday’s strong U.S. Non-Farm Payrolls report reinforced bets on further big rate hikes. The Aussie is under pressure because investors are chasing the faster rising U.S. rates. Meanwhile, the Reserve Bank of Australia (RBA) is expected to raise its benchmark at a much slower pace.