AUD/USD attempts recovery near 0.6150 despite broad US dollar strength, sluggish risk-tone
- AUD/USD seesaws near the upper end of the latest trading range.
- Aussie, AiG Performance of Manufacturing Index surprised with an uptick.
- Coronavirus cases rise in the US, defy optimism from the European numbers.
- Fed announced temporary repo facilities for central banks, China flashed upbeat PMI.
AUD/USD takes rounds to the upper end of the latest trading range while flashing 0.6150 as a quote at the start of Wednesday’s Asian session. The pair paid a little heed to Australia’s second-tier activity data in search of more clues from the upcoming figures. Though, coronavirus (COVID-19) figures tame the risk sentiment and caps the quote’s immediate upside.
The AiG Performance of Manufacturing Index for March surprised markets with 53.7 figures versus 44.3 prior.
The Aussie pair stepped back from the two-week high the previous day as the early-day optimism triggered through upbeat China data/updates waned after disturbing coronavirus (COVID-19) figures from the US and Europe. There are more than 177,000 cases in the US whereas Spain and Italy together register above 200,000 numbers.
US President Donald Trump ruled out calls for national lockdown while also signaled to use $2.00 as a fiscal stimulus. Though analysts at the Australia and New Zealand Banking Group (ANZ) cite fears while getting approval for such a huge spending plan considering it’s equivalence to 9% of nominal GDP.
The Fed also offered another boost to US dollar liquidity in the global markets via repurchase auctions for foreign central banks and other international monetary authorities.
On the data side, the US Consumer Confidence fell sharply to 120.0 in March from 132.6 in February whereas Chicago PMI’s declines to 47.8, versus 49.00 prior, was considered smaller than 40.00 forecast.
It’s worth mentioning that the US 10-year treasury yields dropped mildly to close Tuesday’s trading around 0.67% whereas Wall Street marked losses at the end of the first quarter (Q1) of 2020.
Moving on, Commonwealth Bank (CBA) Manufacturing PMI for March and February month Aussie Building Permits can act as the immediate catalysts whereas the virus news and comments from the US/Aussie policymakers, if any, could offer more clear direction.
Technical Analysis
A daily closing beyond 0.6200 becomes necessary for the buyers to extend the latest recovery moves, failing to do so can recall 0.6000 round-figure on the charts.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
