AUD/USD surges to 12-day high as RBA’s Lowe expects infrastructure investment to benefit the economy
|- RBA’s Lowe spread Aussie positive comments despite citing global growth risks.
- Lack of data may highlight political plays as main drivers.
- 50-day SMA seems immediate resistance to watch during the quote’s additional upside.
Even after continues to highlighting global growth risks and rate cut forecasts, the RBA Governor’s expectations of the likely increase in infrastructure to benefit Australian economy helped the AUD/USD pair as it rises to the 12-day high of 0.6950 during early Monday.
While the sustained weakness of the US Dollar (USD) helped the Aussie to carry its previous strength forward, recent comments from the Reserve Bank of Australia (RBA) Governor Philip Lowe helped the quote rise further.
RBA’s Lowe cited downside risks to the global economic outlook but also said that the macro growth is still reasonable. He also mentioned that markets are pricing in rate cuts in major economies but refrained from providing any hints for the RBA’s future policy moves while speaking at the Australian National University Leadership Forum, in Canberra.
Investors put a higher emphasis on his comments that low rates elsewhere can help the government borrow at exotic lows, which in turn can create more infrastructure investment that would benefit the Australian economy.
It should also be noted that Aussie buyers showed little attention to the US-China trade tussles and the threat-like headlines from Chinese dailies.
Investors may now focus on political plays surrounding the global trade together with USD direction for fresh impulse due to lack of major data left for publishing.
Technical Analysis
50-day simple moving average (SMA) level of 0.6970 and 0.7000 mark seem next on the buyers’ radar whereas a downside break below 21-day SMA level of 0.6930 can recall 0.6900 and 0.6860 back to the chart.
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