AUD/USD reporting marginal gains amid drop on stocks and Aussie bond yields

• AUD/USD is mildly bid at press time despite risk-off tone in the markets. 
• Australian 10-year government yield hit a record low in Asia. 

AUD/USD is currently trading at 0.6930, representing 0.10% gains on the day, amid risk-off tone in the global markets. 

The Asian stocks are flashing red with the Shanghai Composite index currently reporting a 0.20% drop. Other major Asian indices like Japan’s Nikkei, Hong Kong’s Hang Seng and the futures on the S&P 500 index are also feeling the pull of gravity. 

Further the yield on Australia’s 10-year government bond fell to a record low of 1.49% earlier today. The yield has essentially printed a low below the Reserve Bank of Australia’s cash rate of 1.50%. 

Even so, the AUD sellers are not making their presence felt, possibly because the US treasury yields are also losing ground. For instance, the yield on the US 10-year treasury note is currently trading at 2.24%, the lowest level since September 2017. 

Looking forward, the currency pair may come under pressure if the risk aversion worsens. Also, China’s Yuan is again losing altitude. The USD/CNH pair is currently trading at 6.9282, representing 0.10% gains on the day and the probability of a near-term rise to 7.00 would rise sharply if the pair confirms a bull flag breakout with a move above 6.9346, in which case the US Dollar will likely see a broad-based rally. 

Pivot levels