AUD/USD renews multi-month highs near 0.6840 after PBOC cuts RRR

• People’s Bank fo China (PBOC) cuts RRR by 0.5%.
• Antipodeans gain traction on hopes of Chinese economy recovering.  
• US Dollar Index stays calms near mid-98s ahead of key data.

The AUD/USD pair extended its recovery rally into a fourth day on Friday and touched its highest level since August 1 at 0.6841. As of writing, the pair was trading at 0.6838, adding 0.37% on a daily basis.

PBOC supports economic growth

Upbeat macroeconomic data releases from China earlier this week triggered a decisive recovery move in the AUD. With Chinese Commerce Ministry yesterday announcing that the next round of high-level trade talks with the US will take place in October in Washington,  the pair preserved its bullish momentum and extended its rally.

As hinted by the Chinese cabinet on Wednesday, the  People’s Bank fo China (PBOC) today announced that it cut the Required Reserve Ratio by 0.5%, which is expected to inject  $128 billion of liquidity into the economy, and further eased fears over an economic slowdown in the world’s second-largest economy and provided an additional boost to the AUD.

Later in the session, investors will be paying close attention to the US Burau of Labor Statistics’ Nonfarm Payrolls report, which is expected to come in at 158K in August following July’s 164K reading. Previewing the data, “We look for job growth to slow further in coming months, forecasting a 140k gain for August and an average circa 130k through H2 2019. If this occurs, then the unemployment rate will stabilise around its 50-year low,” said Westpac analysts. Ahead of the publication, the US Dollar Index is moving sideways near the 98.50 mark.

US NFP Preview: 8 Major Banks expectations from August payrolls report

Technical levels to watch for