AUD/USD clings to gains near weekly tops, around mid-0.7100s
|- AUD/USD gained strong positive traction following the release of upbeat aussie CPI figures.
- Coronavirus jitters, the risk-off mood benefitted the safe-haven USD and might cap gains.
- The US political uncertainty might also contribute to limit any large currency movements.
The AUD/USD pair built on its Asian session positive move and shot to fresh weekly tops, around the 0.7155 region in the last hour.
The pair added to the previous day's modest gains and caught some strong bids on Tuesday following the release of hotter-than-expected Australian consumer inflation figures. In fact, Australia's headline CPI rose 1.6% QoQ during the third quarter as against a 1.9% contraction in the previous quarter.
Adding to this, the Reserve Bank of Australia's (RBA) trimmed-mean CPI increased 0.4% QoQ versus expectations for a 0.3% rise and -0.1% previous. The upbeat data prompted some short-covering move around the AUD/USD pair, albeit a combination of factors might keep a lid on any further gains.
Firming market expectations that the RBA will ease further at its upcoming policy meeting on November 3 might hold bulls from placing any aggressive bets. This, along with the prevalent risk-off environment might further collaborate towards capping the perceived riskier Australian dollar.
Growing market worries about the potential economic impact of the ever-increasing coronavirus cases, along with the lack of progress in the US stimulus talks continued weighing on investors' sentiment. This, in turn, benefitted the safe-haven US dollar and could drive flows away from the aussie.
That said, the uncertainty about the actual outcome of the US presidential election could limit large currency movements. The incoming polls have been indicating that Democrat candidate Joe Biden is ahead of incumbent President Donald Trump, though the gap is very narrow in certain key swing states.
There isn't any major market-moving economic data due for release from the US on Tuesday. This makes it prudent to wait for some strong follow-through buying before traders start positioning for any further near-term appreciating move for the AUD/USD pair.
Technical levels to watch
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.