AUD/USD stages a solid comeback towards 0.7500 amid risk recovery, PBOC’s RRR cut
- AUD/USD rebounds firmly with S&P 500 futures, as risk rebounds.
- PBOC cuts RRR to support the economy, rescues AUD bulls.
- The pair awaits Fed Monetary Policy Report amid a scarce US docket.
AUD/USD is extending the U-turn from seven-month lows of 0.7409, underpinned by the return of risk appetite and the Chinese central bank’s rate cut announcement.
At the press time, the currency pair adds 0.63% on the day to trade near-daily highs of 0.7478, looking to recapture the 0.7500 threshold.
The aussie’s rebound was fuelled by a recovery in the risk sentiment, with the European stocks back in the green zone on bargain hunting after Thursday’s steep drop.
The S&P 500 futures, the risk barometer, also jumped 0.50% towards 4,350, as markets put aside concerns over slowing global economic recovery due to the Delta covid variant flareups.
Further, the People’s Bank of China’s cut to its Reserve Ratio Requirement (RRR), in order to support the economy, offered another tailwind to the aussie’s turnaround. Meanwhile, rallying oil and copper prices amid China’s move also collaborate with the upside in the resource-liked AUD.
Earlier in the Asian session, the aussie attacked the 0.7400 level after Chinese CPI and PPI growth edged down in June, in light of a fall in pork and commodity prices. A temporary rebound in the US dollar also weighed negatively on the spot.
Attention now turns towards the Fed’s Monetary Policy Report amid a lack of first-tier economic data from the US. In the meantime, the broader market sentiment will continue to influence the risk-sensitive aussie dollar.
AUD/USD: Additional levels
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
