AUD/USD: Sluggish around 0.7600, unimpressed by Biden’s infrastructure plan
|- AUD/USD bounces off 0.7588 as US President Biden unveils $2.25 trillion infrastructure plan details.
- Biden tries to balance the tax hike and please the middle class but is doubtful to gain Republican support.
- Virus woes gain momentum amid mixed vaccine news, China-West tussles continue.
- Multiple second-tier Aussie data are on the table to entertain pair traders.
AUD/USD repeats early Wednesday’s moves, portraying a corrective pullback to regain the 0.7600, during the initial Asian session on Thursday. The pair trimmed most of the previous day’s gains to print a dull close but marked the heaviest losses on monthly basis since October, not to forget 1.5% quarterly losses for Q1 2021.
The quote’s latest bounce could partially be traced from US President Joe Biden’s $2.25 trillion infrastructure plan announcement. However, a dull reaction from the traders’ fraternity and broad US dollar gains play a major role to tame the AUD/USD prices.
Biden’s plan to appease middle-class couldn’t buoy markets…
US president Biden delivered $2.25 trillion in infrastructure spending for eight years and rejected any tax burdens on the middle-income group. Though, fears of a tough time for the bill, considering the Republicans’ dislike of corporate tax, seem to weigh on the optimistic plan.
Read: Us Pres. Biden: No Federal tax increase to anyone making below $400k
Other than the lack of enthusiasm to welcome the much-debated US spending plan, the coronavirus (COVID-19) fears and the US-China tussle also weigh on the market sentiment and AUD/USD prices. Brazil detected a new variant, similar to the South African one whereas France announced a one-month complete lockdown on worsening virus conditions at home. Australia is battling with the local transmission in Queensland but strong vaccinations in the US and the UK help them unlock the virus-led activity restrictions.
Vaccine news was also mixed as Pfizer announced its vaccine is 100% effective in teenagers, after completing phase three trials on children aged 12-15 but a delay in the Johnson and Johnson vaccine due to the mix-up weigh on the mood.
Elsewhere, China keeps battling the West, mainly the US and the UK, over the Hong Kong, Xinjiang and Taiwan issues while upbeat figures from the US and China, not to forget Aussie Building Permits, strengthened economic recovery hopes.
Amid these plays, Wall Street closed mixed and the US 10-year Treasury yield remains strong but the US dollar index pulled back by the end of Wednesday’s trading.
Looking forward, Australia’s Trade Balance and final reading of the Retail Sales for February will precede China’s Caixin Manufacturing PMI to entertain AUD/USD traders during Asia.
Technical analysis
Repeated failures to cross the 0.7700 immediate hurdle suggests AUD/USD bears’ determination to break the 0.7562-57 horizontal area comprising lows marked since December 28, 2020.
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