- AUD / USD rises back to the 0.7750 zone, supported by risk appetite.
- RBA meeting Tuesday: No changes expected, eyes on statement and QE.
The AUD/USD it rose further during the US session and, at time of writing, is trading at 0.7780, new daily highs. The improvement in market sentiment further boosted the Aussie, which is the best performer among the G10 currencies.
The pair is recovering after falling sharply to 0.7690 on Friday, the lowest level in two weeks. The drop in yields in the United States, the rise in share prices (Dow Jones + 2.20% and Nasdaq + 2.30%) contribute to the recovery of commodity currencies.
On Tuesday, the Reserve Bank of Australia (RBA) will have its meeting. On Monday, the central bank announced an increase in the amounts and maturities of its purchase program in an effort to strengthen its control of the yield curve.
“The RBA is clearly pushing harder as interest rates continue to rise. However, you could outline your plan more strongly if you officially aim for longer maturities beyond the current 3-year bonds. The RBA is likely to commit to take stronger steps to maintain YCC and promise to increase QE as needed in the coming months, ”explained BBH analysts.
No changes in RBA rates are expected. Some volatility around the announcement seems to be granted. The statement is due at 03:30 GMT on Tuesday; Before that, the building permits for January and the current account balance for the fourth quarter expire.
In the United States, the PMI and ISM manufacturing index readings for January beat expectations. The key report for the week will be Friday’s non-farm payroll.