- AUD/USD pierces 0.6000 following the drop to a multi-year low.
- The Aussie pair failed to portray recovery in the market’s risk-tone as the Trump Administration, Fed announced measures to counter coronavirus.
- RBA minutes showed readiness to tackle the pandemic, Thursday’s move in the spotlight.
- Comments from the RBA’s Assistant Governor Ellis can offer immediate direction.
Following the Aussie dollar’s slump to be the weakest G10 currency, down 1.9% versus the greenback, the AUD/USD bears catch a breath as the quote bounces off to 0.6020 at the start of Wednesday’s Asian session.
The rainy day funds from the US…
The rainy day funds from the US government and the Federal Reserve’s additional steps to counter negative implications of the coronavirus (COVID-19) offered a boost to the US dollar.
The Trump administration signals more than $1 trillion packages and checks to each American while the Fed ramped up efforts to tame the virus damages via short-term corporate debt.
Despite announcing the salvo of measures in recent days, the Fed policymakers, including Atlanta Fed’s Bostic and Fed’s George, shows readiness on the part of the US central bankers to move ahead to confront the epidemic.
Thursday’s RBA in the spotlight…
On the other hand, the RBA minutes signaled the policymakers’ assent in Thursday’s upcoming moves while markets anticipate something more than just bond purchases amid a salvo of measures from the various central bankers.
That said, the market’s risk-tone remained on the recovery mode with the US 10-year and 30-year treasury yields up 35/40 basis points (bps) while Wall Street closing bounced off the sea of red with mild closing in the green.
Comments from the RBA’s Assistant Governor (Economic) Luci Ellis will be the immediate catalyst followed by Australia’s Westpac Leading Index for February. However, markets will be more interesting to hear the government/central bank actions to counter the negative implications of the deadly virus.
Technical Analysis
Unless bouncing back beyond the short-term resistance line, currently at 0.6110, the AUD/USD prices continue to signal the return of March 2003 lows near 0.5880.
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