AUDUSD justifies risk-barometer status on US debt limit set-up amid sluggish markets

Risk profile improves on Monday as US President Joe Biden and House Speaker Kevin McCarthy agree on a compromised deal to avoid the US default. Even so, the agreement needs to pass through the House and the Senate to be the law, which in turn appears to challenge the risk-on mood amid holidays in multiple markets including the US.

That said, the market‘s cautious optimism also takes clues from improvement in China’s Industrial Profits. Though, hawkish hopes from the Federal Reserve, backed by upbeat data, check the optimists.

With this, the US Dollar retreats from a two-month high while the commodities pare recent losses and the Antipodeans also improve.

AUDUSDs risk-barometer status allows it to cheer the firmer sentiment, as well as justify the hopes that the RBA will also follow the RBNZ in lifting the rates.

Elsewhere, Gold bounces off recent bottoms whereas Crude Oil grinds higher but holidays in the UK, Switzerland, Eurozone and the US restrict moves of the EURUSD, GBPUSD and USDCHF.

On a different page, BTCUSD and ETHUSD bulls take a breather at three-week highs after rising the most since early April the previous day.

Following are the latest moves of the key assets:

• Brent oil prints mild gains near $77.60 after bouncing off one-week low the previous day.

• Gold price struggles to defend its latest gains at two-month low, pressured near $1,945 at the latest.

• USD Index eases from a 10-week high, making rounds to 104.20 as we write.

• Wall Street closed mixed and so did the Asia-Pacific shares. However, equities in Europe and the UK are off due to the holidays.

• BTCUSD and ETHUSD print mild losses around $27,900 and $1,900 at the latest.