AUD/USD marches towards 0.6650 as fears from SVB abate, Aussie employment, US inflation eyed

AUD/USD portrays the market’s risk-on mood as it prints the biggest daily gains in more than a month, rising 0.90% intraday to refresh daily tops near 0.6635 during early Monday morning in Asia. In doing so, the risk-barometer pair cheers the US authorities’ actions to tame the risks emanating from the Silicon Valley Bank (SVB) and Signature Bank.

Also read: US Treasury Department, Fed unveil action plan on Silicon Valley Bank fallout

That said, US Treasury Department, Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) took joint actions to tame the risks emanating from the SVB and Signature Bank. “All depositors of Silicon Valley Bank and Signature Bank will be fully protected,” said the authorities in a joint statement released a few minutes back. S&P 500 Futures and US Treasury bond yields consolidate the previous day’s losses after the late plan for the US authorities to tame the financial crisis.

Also read: Regulators close Signature bank, announce plan to make depositors whole

It should be noted, however, that the fears of the Aussie pair’s pullback are high amid the fading of the risks emanating from SVB and Signature Bank. The reason could be linked to Friday’s US jobs report. On Friday, United States Nonfarm Payrolls (NFP) grew more than 205K expected to 311K in February, versus 504K (revised), while the Unemployment Rate rose to 3.6% for the said month compared to 3.4% expected and prior. Further, the Average Hourly Earnings rose on YoY but eased on monthly basis for February whereas the Labor Force Participation increased during the stated month.

Although the fears of the Fed hawks’ return and downbeat AUD/USD are high, the Federal Reserve (Fed) officials’ two-week silence ahead of the monetary policy meeting may probe the bears.

Though, the US Consumer Price Index (CPI) for February, up for publishing on Tuesday, will precede the Retail Sales and preliminary readings of the Michigan Consumer Sentiment Index for March, up for publishing on Wednesday and Friday, will be crucial for traders to watch.

At home, the latest dovish hike of the Reserve Bank of Australia (RBA) may gain attention if Thursday’s headline Aussie employment data and RBA Bulletin print downbeat outcomes.

Technical analysis

A sustained upside break of the five-week-old descending resistance line, around 0.6665 by the press time, becomes necessary to recall the AUD/USD bulls.