- AUD / USD is posting modest daily losses on Friday.
- The subdued tone of the RBA Lowe’s governor keeps the AUD / USD rise limited.
- The US dollar index fluctuates in a relatively tight range above 91.00.
The pair AUD/USD is posting modest daily gains above 0.7600 and looking to break its three-day losing streak. However, the pair’s recovery appears to be a technical correction amid a moderate shift in the policy outlook from the Reserve Bank of Australia (RBA). At time of writing, the AUD / USD was up 0.17% on the day at 0.7619.
On Tuesday, the RBA left its policy rate unchanged at 0.1% as expected, but announced that it decided to buy AUD 100 billion of bonds starting in mid-April. At a press conference Wednesday, RBA Governor Phillip Lowe said the AUD would have “unwanted upward pressure” without the extension of the quantitative easing program.
Market optimism limits USD gains
On the other hand, the US Dollar Index appears to be struggling to extend its rally and is trading in a narrow band above 91.00 on Wednesday. Earlier in the day, US data showed that business activity in the service sector continued to expand at a strong pace in January, but market reaction was relatively subdued.
Meanwhile, increased optimism for additional fiscal stimulus in the US is helping to improve market sentiment and allowing AUD / USD to stay in positive territory. At the moment, the S&P 500 Index is up 0.5% on the day at 3,845.
White House spokeswoman Jen Psaki said Wednesday that Democratic senators and President Joe Biden agreed on the need to act quickly to deliver checks for $ 1,400 to Americans.