- AUD/USD pares recent losses amid the second weekly fall.
- FOMC minutes reiterate known concerns, probed US dollar bulls after release.
- Aussie data came in weaker versus the US figures, virus woes escalate.
- RBA’s Lowe to speak on labor market and monetary policy.
AUD/USD consolidates weekly losses around 0.7485-90, off recent lows, amid the initial Asian session trading on Thursday. The Aussie pair dropped during the last two days on strong US dollar, amid the coronavirus (COVID-19) woes and uncertainty over the Fed’s next moves. The quote’s latest weakness undermined the FOMC Minutes, despite easing a bit, as traders brace for RBA Governor Philip Lowe’s speech at 02:15 AM GMT.
Minutes of the latest Federal Open Market Committee (FOMC) unveiled that major policymakers remained concerned over the upside risk to inflation but “substantial further progress” needed to adjust monetary policy was seen. Hence, the week’s much-awaited event failed to offer anything new but teased US dollar bulls around the fresh three-month high after the release.
On the other hand, the covid woes also gain momentum as virus variants resist vaccines and spread faster. At home, local lockdowns continue despite witnessing softness in figures of late. Even so, the Aussie Health Expert Catherine Bennett, per ABC News, says many more Australians need to be vaccinated before states and territories can even consider doing away with lockdowns to control outbreaks.
The risk-off mood keeps the US dollar index (DXY) up while the US 10-year Treasury yields dropped to the fresh low since February. However, equities cheered the Minutes’ refrain from hawkish tilt and closed positive for Wednesday.
It’s worth mentioning that the second tier Aussie data, namely AiG Performance of Services Index, couldn’t match the standard of US economic strength, as portrayed by the details of JOLTS Job Openings and FOMC minutes.
Looking forward, AUD/USD traders will pay close attention to RBA’s Lowe to reconfirm his cautious optimism cited earlier in the week. Should the policymaker hesitate to be optimistic over the Oz economy and keeps citing the labor market concerns, the Aussie prices may have an additional burden to the south.
It’s worth noting that the ECB’s special meeting and weekly US Jobless Claims are extra catalysts on the calendar to follow for fresh impulse.
Technical analysis
Sustained trading below a three-week-old resistance line and 200-DMA, respectively around 0.7500 and 0.7580, keeps AUD/USD bears on the way to the yearly bottom near 0.7445, marked last week. However, any further weakness will be questioned by August 2020 top close to 0.7415 and the 0.7400 threshold.
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