AUD/USD begins the week on the back foot, seesaws near 0.6150 amid risk-off
|- AUD/USD fails to hold onto the previous recovery gains.
- Aussie PM signaled more measures, Treasurer announced changes to foreign investment review framework.
- Coronavirus continues to take its toll on the global economies, the US and the UK are in the spotlight off-late.
- A light economic calendar will keep virus headlines, stimulus on the driver’s seat.
While extending its late-Friday pullback from the two-week top, AUD/USD slips below 0.6150 at the start of the week’s Asian trading session on Monday. While the recent greenback weakness pleased the Aussie pair buyers off-late, the broad risk-off seems recently weighing on the quote.
The US takes bold measures to combat the pandemic but not winning so far…
Be it multiple rate cuts or trillions of dollars worth of Quantitative Easing (QE) and other measures, the US policymakers don’t refrain from any bold steps to counter against the coronavirus (COVID-19). The latest measures were $2.2 trillion that got approval from the House of Representatives on Friday to reach President Donald Trump’s table for being the law.
US Trump also continues to perform in full steam mode while targeting to overcome the pandemic as soon as possible. In a move to do so, the Republican leader recently turned down quarantine for the hot-spots, namely New York, New Jersey and Connecticut, while urging residents to refrain from non-essential domestic travel for two weeks. It was also reported that the President doubts the recent forecasts from that suggest an increase in coronavirus-led fatalities.
Even so, members of his Coronavirus Task Force, namely Anthony S. Fauci and Deborah Birx, anticipate a huge rise in the days to come before the dust settles.
While marking the current status of the epidemic, it can be known that the US has more than 2,200 coronavirus-related deaths and 130,000 confirmed cases.
On the economic front, the spike in the US jobless claims and the drop in the Michigan Consumer Confidence was the latest areas of concern with the Dallas Fed President Robert Kaplan signaling further advances in the unemployment rate in the low to mid-teens.
The Aussie policymakers are also on the move…
Alike their US counterparts, Scott Morrison and the company also fight with the full strength. The Aussie PM recently mentioned to media that the government will provide further income support and the next assistance package will be bigger than what has been seen so far.
Further, the Australian Treasurer, Joshua Anthony Frydenberg, has announced changes to Australia’s foreign investment review framework, effective from 10.30 pm AEST on Sunday 29 March 2020, relating to monetary thresholds and timeframes for reviewing applications.
Amid all these plays, the market’s risk-tone remains under pressure with the US 10-year treasury yields losing 13 basis points (bps) to 0.68% and Wall Street marking losses by the end of their active session on Friday.
Considering the lack of major data/events on the economic calendar, markets will keep eyes on the virus/stimulus news for fresh impulse.
Technical analysis
21-day SMA near 0.6200 is still pending for a break until then risks of the pair’s pullback moves to 0.6000 marks comprising 10-day SMA can’t be ruled out.
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