AUD/USD climbs back above 0.6600 on soft US Dollar, RBA’s Lowe remarks
|- Federal Reserve officials hawkish commentary failed to underpin the US Dollard.
- Sentiment turned positive, although China’s Covid-19 cases peaked nearby 28,000.
- Reserve Bank of Australia Governor Lowe puts back 50 bps on the table if needed.
The Australian Dollar (AUD) is recovering some ground in the North American session, after hitting a daily low beneath 0.6600, amid an improvement in sentiment. Factors like Federal Reserve (Fed) officials’ hawkish commentary and China’s Covid-19 outbreak were not an excuse for the AUD to rise against the US Dollar (USD). At the time of writing, the AUD/USD is trading at 0.6629.
Positive sentiment underpins the Australian Dollar
Wall Street is opening in the green. On Monday, a slew of US central bank policymakers. San Francisco Fed President Mary Daly said she’s worried about overtightening, and she foresees rates initially at 5%, and from there, rates could go higher, depending on data. Later, the Cleveland Fed President Loretta Mester said that slowing the pace of interest rates in the next month is possible. Mester commented that pausing is not an option and agreed with Daly, expecting rates at around 5%.
Aside from this, China’s Covid-19 outbreak is grabbing the headlines after the disease caused three deaths in the last three days. Beijing increased restrictions, and arrivals had to take three PCR tests within the first three days. Some schools switched to online learning, while some districts in Beijing asked citizens to stay at home for at least five days.
In the Asian session, the Reserve Bank of Australia (RBA) Governor Philip Lowe said that if salaries go up, that will keep inflation in Australia at around “Seven percent, plus or minus (a bit),” adding that a wage spiral in the ‘70s, ‘80s, turned out to be a disaster. Lowe sympathized with workers who can’t accept their wages falling behind, though he added that inflation would get to the RBA’s target if the country can ride through this period. He expects to raise rates further and even put 50 bps increases on the table.
What to watch
The Australian economic calendar will feature S&P Global PMIs for November. On the US front, the Fed parade will continue, with Loretta Mester, Esther George, and James Bullard, crossing the wires.
AUD/USD Key Technical Levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.