AUD/USD rises eyeing 0.7300 on upbeat market sentiment
|- AUD/USD clings to the 0.7280-90 range despite broad-US dollar strength.
- China’s Evergrande worries ease, lifting the market sentiment.
- Fed’s Williams and Brainard supporting bond-tapering.
During the European session, the AUD/USD dipped to 0.7248, but the pair advanced as American traders got to their desks. The AUD/USD is up 0.40% during the day, trading at 0.7290 at the time of writing.
As the day progresses, the market mood is in risk-on mode. Investors’ appetite for riskier assets weighs on safe-haven currencies, except for the greenback. The US Dollar Index (DXY), which measures the buck’s performance against six peers, records gains of 0.10%, currently at 93.37.
The lack of economic news out of Australia was not an excuse for AUD/USD rise. Despite lockdown measures applied since the Delta variant outbreak, Australian Prime Minister Scott Morrison signaled that the virus-led border restrictions among the states would not be eased unless the country hits an 80% full vaccination target.
Further, Evergrande’s woes faded throughout the weekend, keeping the market calm. The People’s Bank of China injected more cash into the banking system as the Shenzen government began investigating the real-estate giant, signaling that authorities could move to contain contagion risks.
Putting this aside, across the pond, the Durable Good Orders for August rose by 1.8% versus a 0.7% expected. Meanwhile, Nondefense Capital Goods Orders excluding Aircraft expanded 0.5% more than the 0.4%. Investors slightly ignored the report as Fed speakers hit the wires.
New York’s Fed President Williams and Fed’s Governor Lael Brainard hit the wires
The New York Fed’s President John C. Williams commented that the Federal Reserve might soon start to reduce the pace of its asset purchases if the economy continues to improve as expected. “Assuming the economy continues to improve as I anticipate, a moderation in the pace of asset purchases may soon be warranted,” Williams said.
On Wednesday of the last week, Fed’s Chairman Jerome Powell said that the economy is one “decent” monthly jobs report short of meeting the threshold for tapering and will likely begin to do so in November.
Meanwhile, according to wires, Fed’s Governor Lael Brainard, whose posture is dovish, said that if hiring continues “as I hope” the economy “may soon meet the mark,” that would warrant reducing the bond purchasing program. Brainard added, “we need to be humble about our ability to correctly anticipate future economic conditions given the unpredictability of the virus.”
KEY 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.