- AUD / USD pays little attention to the RBA’s monetary policy decision.
- The RBA keeps the benchmark interest rate and the three-year yield target unchanged.
- Sentiment remains upbeat amid hopes for US stimulus and expectations for vaccines.
- The news of the American aid package and updates on the coronavirus and will be key.
The AUD/USD it is moving higher around the 0.7370 region, at daily highs, following the RBA’s monetary policy decision on Tuesday. The pair benefits from broad sentiment on demand due to risk in markets as well as weak US dollar.
The RBA has met the general expectations and has kept the interest rate unchanged at 0.10%. As I reviewed the details, the rate statement read: “The Board keep the size of the bond purchase program under review, particularly in light of the evolution of the outlook for employment and inflation “.
See: RBA will keep the size of the bond purchase program under review
The appetite for risk It also benefits from the proximity of a stimulus for the United States covid, as noted by Fed Chairman Jerome Powell and US Treasury Secretary Steve Mnuchin in their prepared remarks for today’s testimony. While Powell identifies the moderation of economic growth As a risk that needs an economic boost, Treasury Secretary Mnuchin directly urges Congress to use $ 455 billion from the CARES Act to provide much-needed relief.
On the other hand, the optimistic figures for Caixin Manufacturing PMI for November China and Hopes for Positive Growth Figures for Fourth Quarter GDPexpected 6.6% QoQ also favor the AUD / USD bulls, as Beijing is Canberra’s biggest customer. Even so, bulls have hesitated as China has recently turned anti-trade by the decision of the Australian government led by Scott Morrison to support the investigation of the origin and outbreak of COVID-19.
It should also be noted that the provision of Modern Requesting emergency use of your virus vaccine from the United States Food and Drug Administration (FDA) also increases the feeling of risk. As a result, equity markets in Asia-Pacific join US Treasury yields to reflect market optimism.
Looking ahead, news about the virus and vaccine developments will accompany the testimonies of Powell from the Fed and Treasury Secretary Mnuchin. Also, the US ISM Manufacturing PMI and updates on the western dispute with China may generate some opportunities around the AUD / USD pair.
AUD / USD technical analysis
AUD / USD bounce off the 0.7345 / 40 support zone, comprising highs set between mid-September and November 17, keeps the pair heading towards the round 0.7400 level. An upward sloping trend line from Nov 13, now at 0.7310, also acts as close support.
AUD / USD technical levels