Carry Trade Revival: AUD/USD Up 0.6% as Risk Appetite Returns

Currency markets witnessed a notable return to carry trade strategies, with high-yielding currencies outperforming in quiet trading conditions. AUD/USD advanced 0.6% to 0.6580, while NZD/USD gained 0.5% to 0.6120, as investors sought yield differentials amid stable market conditions. EUR/USD edged 0.2% higher to 1.0520, while GBP/USD climbed 0.3% to 1.2650. The Japanese yen underperformed, with USD/JPY consolidating near 156.50 despite defending key support levels. Low volatility and improved risk sentiment have encouraged traders to re-establish carry positions, particularly favoring commodity currencies against funding currencies. Technical indicators suggest AUD/USD faces resistance at 0.6600, with momentum building for a potential break higher. Market participants await Wednesday's Australian employment data and Thursday's ECB meeting minutes for fresh directional catalysts.