AUD/USD Hits New High on Risk-On Flows and Soft US CPI Data

AUD/USD surged to a fresh session high during Monday's trading as risk-on sentiment drove the Australian dollar higher against a weakening US dollar. The rally was underpinned by better-than-expected US CPI data, which eased inflation concerns and boosted expectations for a more accommodative Federal Reserve stance. Fed Chair Warsh's ongoing testimony on Capitol Hill maintained a cautious tone, but markets focused on the positive inflation surprise. US equities reflected the bullish mood, with the NASDAQ rising approximately 204 points (0.80%) and the S&P 500 gaining 0.37%, reinforcing the risk-on environment that typically benefits the growth-sensitive Australian dollar. Technically, AUD/USD has broken above prior resistance to establish a new high, suggesting further upside momentum if risk appetite persists. Traders should watch for potential resistance at nearby psychological levels and monitor any shifts in Fed rhetoric that could alter rate cut expectations. Continued equity strength and supportive commodity prices could sustain the pair's bullish trajectory in the near term.