- AUD/USD recovers slightly following last week's sell-off.
- RBA is expected to keep its policy rate unchanged at 0.75% in January.
- US Dollar Index clings to gains near 97.70 ahead of Manufacturing PMI data.
The AUD/USD pair lost more than 100 pips last week amid heightened concerns over the negative impact of coronavirus outbreak on the Chinese economy. With China injecting liquidity to limit the selloff in equity markets and voicing its commitment to help the economy, the AUD/USD staged a technical rebound on Monday and has gone into a consolidation phase around the 0.6700 handle.
Eyes on RBA
During the early trading hours of the Asian session on Tuesday, the RBA will announce its interest rate decision and publish its monetary policy statement. Markets expect the bank to keep its policy unchanged at 0.75%.
Previewing the data, "we think the combination of the latest 4Q19 inflation report as well as the stronger-than-expected labour market data for December, will be sufficient to keep the RBA on hold in February," said Lee Sue Ann, Economist at UOB Group. "That said, there are headwinds from the bushfires, drought, and downturn in residential construction activity, as well as the ongoing coronavirus. As such, we are not ruling out further policy stimulus, both monetary and fiscal.”
On the other hand, the greenback is staying relatively strong against its major rivals on Monday to keep the pair's upside capped for the time being. Later in the session, the IHS Markit's and the ISM's Manufacturing PMI data from the US will be looked upon for fresh impetus. At the moment, the index is up 0.35% on the day at 97.70.
Technical levels to watch for
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD remains under pressure above 0.6400
AUD/USD managed to regain some composure and rebounded markedly from Tuesday’s YTD lows in the sub-0.6400 region ahead of the release of the Australian labour market report on Thursday.
EUR/USD faces decent contention around 1.0600
The knee-jerk in the Greenback reignited some buying interest in the risk complex and pushed EUR/USD to three-day highs near 1.0680, rapidly leaving behind the recent yearly low around 1.0600.
Gold eases despite risk-off mood
Gold trades in a relatively tight range near $2,390 in the second half of the day on Wednesday. In the absence of high-tier data releases, investors keep a close eye on headlines surrounding the Iran-Israel conflict.
Ethereum trades around the $3,000 support following a surge in validator queue
Ethereum (ETH) continued a sideways movement on Wednesday as investors seemed to be waiting for an upward or downward price catalyst. Despite the price stagnancy, the ETH validator queue - possibly fueled by the DeFi restaking boom - rose sharply.
Australia unemployment rate expected to rise back to 3.9% in March as February boost fades
Australia will publish its monthly employment report first thing Thursday. The Australian Bureau of Statistics is expected to announce the country added measly 7.2K new positions in March after the outstanding 116.5K jobs created in February.