AUD/USD: Mildly bid above 0.7750 despite mixed RBA minutes, PBOC inaction

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  • AUD/USD refreshes intraday high following RBA minutes, PBOC rate decision.
  • RBA minutes reiterate dislike for unemployment rate, PBOC leaves interest rates unchanged.
  • Risk-on mood backs the bulls, US dollar consolidation test further upside.
  • Qualitative catalysts will be in the spotlight amid a light calendar.

AUD/USD stays well bid near 0.7780, up 0.25% intraday, during early Tuesday. While mild risk-on mood favored the quote initially in Asia, minutes of the latest Reserve Bank of Australia’s (RBA) monetary policy meeting and the PBOC Interest Rate Decision favored the bulls off-late.

As per the latest RBA minutes, the board members remain committed to doing what it reasonably can do to support Australian economy while citing the need for “highly supportive” monetary conditions.

Read: RBA Minutes: No hurry to tighten policy settings

Further, the People’s Bank of China (PBOC) matches wide market expectations of keeping the benchmark rates unchanged. That said, the PBOC keeps one-year and five-year around 3.85% and 4.65% respectively during the latest monetary policy meeting.

Read: PBOC keeps one-year loan prime rate unchanged at 3.85%

Market sentiment dwindles amid headlines concerning Russia, China and the coronavirus (COVID-19). While geopolitical fears emanating from Kremlin and Beijing test the bulls, mixed concerns on covid join US President Joe Biden’s readiness to alter some parts of his $2.25 trillion infrastructure spending to favor the optimists.

Against this backdrop, S&P 500 Futures print mild gains after stepping back from the record top the previous day. Further, the US 10-year Treasury yields remain firm at around 1.60% whereas the US dollar index (DXY) consolidate the heaviest drop in 2021 with a corrective pullback to 91.10.

Given the initial market reaction to the day’s key events in Asia, AUD/USD pair traders may have to keep their eyes on the risk catalysts for fresh impulse. Herein, comments from China’s President Xi Jinping will be important as he will be addressing a forum on global risks and might convey the Washington-Beijing tussles over there.

Technical analysis

Multiple tops around 0.7800, marked since early January, test AUD/USD buyers cheering sustained trading beyond the 50-day SMA level of 0.7720.

 

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