AUD/USD stays depressed below 0.6600 after RBA’s Lowe
|- AUD/USD ignores upbeat comments from RBA’s Lowe, extends pullback from 10-week top.
- Risk-tone sours amid fresh US-China tussle, virus worries.
- US preliminary PMIs, Jobless Claims can decorate the calendar.
AUD/USD stays offered, refreshes intraday low to 0.6551, down 0.70% on a day, after RBA Governor’s comments on early Thursday. Even if the Aussie central bank governor Philip Lowe tried to paint a rosy picture of the Australian economy, a close look at the comments suggest further expansion of the RBA's Quantitative Easing (QE). As a result, the pair extends previous fall that mainly focused on the US dollar pullback and fresh risk-off sentiment amid trade/virus woes.
Read: RBA’s Lowe: Australian financial system is resilient and is well placed to deal with COVID-19
Fears of coronavirus resurgence have taken a toll on the risk-tone as China’s second wave and latest global virus data suggest the worst isn’t over. The updates also pour cold water on the face of optimism surrounding the economic restart.
Also weighing on the trading sentiment are the latest tweets from US President Donald Trump, not to forget the early-Asian news from Washington Post, that signals intensified tension between the US and China.
Furthermore, the Aussie-China tussle is still not solved even if the Global Times signaled positive indicators in its latest piece.
Amid all these, the US dollar index (DXY), a gauge of the greenback versus the major currencies, recovers from 14-day low and adds extra burden on the pair.
That said, US 10-year Treasury yields drop 1.7% to 0.662% whereas stocks in Asia-Pacific and S&P 500 Futures also register mild losses below 1.0% by the time of writing.
Even if the trade/virus updates are back in focus, preliminary readings of the US May month PMIs and the weekly Jobless Claims will also be important to watch during the rest of the day. It should also be noted that the RBA’s Assistant Governor Guy Debelle is also up for speaking during the day and will be followed for fresh impulse.
Technical analysis
Failures to refresh multi-day high above 0.6665 direct the Aussie pair towards 100-day SMA retest, near 0.6500 now. Also acting as an upside barrier is the March month top surrounding 0.6685/90 and 0.6700 round-figure.
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.