- AUD / USD bounces firmly off the S&P 500 futures as risk recovers.
- PBOC cuts RRR to support economy, rescues AUD bulls.
- The pair awaits the Fed’s Monetary Policy Report amid a tight US economic calendar.
The AUD/USD It is extending the U-turn from the seven-month lows of 0.7409, supported by a return in risk appetite and the announcement of a rate cut from the Chinese central bank.
At press time, the currency pair adds 0.63% on the day to trade at near-daily highs of 0.7478, seeking to regain the 0.7500 threshold.
The aussie rally was fueled by a recovery in risk sentiment, with European stocks back in the green zone after Thursday’s sharp decline.
S&P 500 futures, the barometer of risk, were also up 0.50% toward 4,350 as markets brushed aside concerns about a slowdown in the global economic recovery due to the new variant of COVID, Delta.
In addition, the People’s Bank of China cutting its Reserve Ratio Requirement (RRR), in order to support the economy, provided another tailwind for the Australian dollar’s turnaround. Meanwhile, the rebound in oil and copper prices amid the China measure is also helping the AUD rise.
Earlier in the Asian session, the Australian dollar attacked the 0.7400 level after China’s CPI and PPI growth declined in June, in light of a drop in pork and commodity prices. A temporary rally in the US dollar also had a negative effect on the pair.
Attention is now turning to the Fed’s Monetary Policy Report amid the lack of top-tier economic data from the US Meanwhile, overall market sentiment will continue to influence the risk-sensitive Aussie.
AUD / USD: additional levels