- AUDUSD has resurfaced after slipping below 0.6660 despite unchanged PBOC’s monetary policy.
- Led by rising Covid-19 cases and weaker real estate demand, the PBOC was expected to sound dovish.
- Going forward, the speech from RBA’s Lowe will be of utmost importance.
The AUDUSD has retreated after dropping below the immediate support of 0.6660 despite the People’s Bank of China (PBOC) keeping its stance on interest rates ‘unchanged’.Earlier, the asset witnessed selling pressure while attempting to cross the immediate hurdle of 0.6680 in the Tokyo session.
Led by rising infections of Covid-19 and vulnerable real estate demand in China, the PBOC was expected to sound ‘dovish’ on its Prime Lending Rates (PLRs). The domestic catalysts have weakened economic projections extremely, therefore a rate cut was in consideration. An absence of expansionary measures in the monetary policy has brought volatility in the Australian dollar, being a leading trading partner of China.
Last week, the release of upbeat Australian employment data delighted the Reserve Bank of Australia (RBA). As per the Australian Bureau of Statistics, the economy managed to make fresh additions in the payroll market by 32.2k vs. the consensus of 15k and the prior release of 0.9k. Also, the Unemployment Rate was trimmed to 3.4% vs. the expectations of 3.6% and the former figure of 3.5%. This might support the RBA in hiking its Official Cash Rate (OCR) unhesitatingly.
Meanwhile, the US dollar index (DXY) has established above the round-level hurdle of 107.00 and has accelerated to near Tuesday’s high of 107.24. A rebound in the negative market sentiment is impacting the risk-perceived currencies. The 10-year US Treasury yields have dropped further below 3.81% as chances of the continuation of 75 basis points (bps) rate hike spell by the Federal Reserve (Fed) have trimmed vigorously.
Going forward, investors will focus on the speech from RBA Governor Philip Lowe, which will be delivered on Tuesday. RBA Governor may dictate the likely monetary policy actions ahead.
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
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.