AUD/USD: Catching the bid above 0.6600 as RBA’s Lowe praises economic package
|- AUD/USD remains on the front foot after RBA Governor Philip Lowe’s comments.
- The RBA policymaker says the evidence so far is the economic package is working.
- Political/trade tensions between the US and China seem to fail in disappointing the markets amid hopes of the economic restart.
AUD/USD takes the bids near 0.6629, up 0.05% on a day, amid the initial hour of Tokyo open on Thursday. The pair’s latest catalyst comes from the RBA Governor Philip Lowe who sounds optimistic before the Senate Select Committee on the coronavirus (COVID-19).
In addition to praising the efforts to combat the pandemic, the RBA leader also cites the signs of bottoming out in the labor market. Additionally, the policymakers said, “RBA will maintain its expansionary monetary policy until progress is made towards full employment and we are confident about inflation.”
Read: RBA Lowe: Mid March package is working and building a bridge to recovery
Earlier during the day, the US-China tussle tried to extend the Aussie pair’s pullback moves from the 11-week low, portrayed the previous day. However, US dollar weakness countered the bears.
The US House of Representatives passed a bill to levy sanctions on the Chinese diplomats involved in the Xinjiang case. Following the news, the Chinese embassy showed readiness to retaliate but offered no details.
Other than the recent likely sanctions, the dragon nation is under the threat to witness additional hardships from the US by the end of the week, as cited by US President Donald Trump on Wednesday. While paving the way for the punitive measures, US Secretary of State Mike Pompeo announced on Wednesday that Hong Kong is no longer autonomous from China.
Even so, the market’s trading sentiment remains positive amid hopes of economic restart and the virus cure. To portray the same, the US 10-year Treasury yields and Japan’s NIKKEI flash gains by the press time.
Other than the positive risk-tone, US dollar weakness also plays a role in fueling the quote. The greenback might have taken clues from the New York Fed President John William’s signal for the Quantitative Easing (QE).
Looking forward, traders will keep eyes on the US-China tussle for fresh impulse. Additionally, the US first revision of the Q1 GDP, Durable Goods Orders and Weekly Jobless Claims also become important to watch.
Technical analysis
Pair’s sustained trading above April 30 high near 0.6570/65 keeps the Aussie bulls directed towards March top near 0.6686 ahead of targeting 0.6700 round-figure. In a case where the AUD/USD prices slip beneath 0.6565, 100-day SMA near 0.6486 becomes the strong support to follow.
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