AUD/USD still stuck within 0.7600-0.7660ish parameters, after bouncing at the big figure

AUD/USD continues to consolidate between 0.7600 and 0.7660ish parameters, which is not a surprise really, given that the big figure has offered decent support to the downside now for more than one week, while the 0.7660-0.7670 area, which contains the late-March/early-April highs and the 21-day moving average, is offering up decent resistance. At present, the pair is consolidating around the 0.7650 mark, having rebounded from Asia Pacific lows of just above 0.7600. That means the pair gained about 0.5% or close to 40 pips on the day on Thursday. 

Driving the day

The recent news about Australia and New Zealand reopening their travel bubble was expected to provide a minor boost to the antipodes by some desks, though this does not yet appear to have come to fruition. Indeed, whilst a weaker dollar this week has supported both AUD/USD and NZD/USD, the antipodes sit in the bottom half of the G10 FX performance table on the week, up 0.6% and 0.4% versus the buck respectively. Gains in the likes of EUR and JPY versus the buck have been much more significant (they are up 1.3% each against the dollar on the week).

Relative underperformance in the antipodes comes despite the fact that global equity markets, to which they are positively correlated, have been doing well. Perhaps underperformance in the Aussie has something to do with disappointment about the Australian vaccine rollout, which has underdelivered so far amid export restrictions in the EU that prevented roughly 3M AstraZeneca vaccines from reaching the country last month.

Amid a lack of other news of note from down under, AUD/USD has instead traded broadly as a function of USD flows and it looks as though this will remain the case for the rest of the week. Fed Chair Jerome Powell delivered characteristically dovish remarks at an IMF panel on Thursday; he noted strong recent data and optimism about the recovery, cautioned rising Covid-19 cases in the US and abroad remain a risk and reiterated that the US economy remains a long way from the Fed's goals and the Fed wants to see actual progress towards these goals before tightening. Other Fed speakers sang from the same hymn sheet. Needless to say, the above dovish reassurance did seem to hurt the dollar, help equity markets and thus help the likes of AUD/USD. Traders will be on the lookout for the release of the US March Producer Price Inflation report on Friday, which may give some indications ahead of next week's more important March Consumer Price Inflation report.