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  • AUD/USD rises 20 pips to levels above 0.7290 after RBA minutes. 
  • The economic downturn has been less severe than expected, the minutes said. 
  • Australia’s House Price Index suffered a bigger-than-expected decline in Q1.

AUD/USD recovered from session lows after the Reserve Bank of Australia’s (RBA) September meeting minutes said the virus-induced downturn has not been as severe as expected and recovery is underway in most of Australia. 

However, the minutes added that the recovery has been uneven, and wage and price pressures remain subdued and left the doors open for additional stimulus. 

The RBA’s upbeat comments on the economy overshadowed the 1.8%  quarter-on-quarter decline in Australia’s House Price Index in the second quarter. The markets were expecting a 1% decline following the first quarter’s 1.6% gain. 

As such, the AUD/USD pair jumped from 0.7272 to 0.7292, reversing the dip seen ahead of the RBA minutes. 

The buying pressure around the Aussie will likely strengthen if China’s Retail Sales and Industrial Production data, scheduled for release in a few minutes, beat estimates, reinforcing expectations for a faster recovery in the world’s second-largest economy. 

Besides, the People’s Bank of China’s decision to inject a net 230 billion yuan into the system could bode well for the risk sentiment and the Aussie dollar. 

Technical levels