AUD/USD: Refreshes three-year high to inch closer to 0.8000 amid broad risk-on mood
|- AUD/USD rises to fresh high since February 2018, up for sixth day.
- Market sentiment buoyed as Fed policymakers reject reflation fears by closing doors to abrupt policy change.
- Wall Street cheers easy money, US dollar drops.
- Australia’s Q4 Private Capital Expenditure decorates calendar, risk signals are the key.
AUD/USD marks another push to grab the 0.8000 threshold by rising to the fresh highs in 36 months, currently around 0.7970, during the initial Asian session on Thursday. The aussie pair followed upbeat sentiment while cheering the central bankers’ firm support to the easy money policy and rejecting the reflation fears.
Fed turns down fears of policy tightening…
By firmly supporting the current monetary policy, also turning down abrupt moves without enough prior notice and confirmation from data, Fed policymakers managed to renew market optimism. Not only Federal Reserve Chairman Jerome Powell reiterated his bearish bias but Vice Chair Richard Clarida and Fed Governor Lael Brainard also backed the move that pushed back chatters over monetary policy tightening.
This helped equities and bond yields to rally while the US dollar index (DXY) snapped Tuesday’s corrective pullback by the end of Wednesday’s North American trading. Also portraying the risk-on mood could be the rally in commodities.
Furthermore, news that Pfizer-BioNTech vaccines have 94% effectiveness after two doses, per Reuters, adds to the market optimism.
Looking forward, AUD/USD traders will have to take clues from the risk catalysts as scheduled economic data needs to be extremely different, due to its second-tier character, to wobble the pair.
Technical analysis
Unless breaking below the highs marked during October 2017 and March 2018, around 0.7900, AUD/USD is less likely to probe the rally towards the 0.8000 psychological magnet.
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.