- AUD/USD pulls back from three-week highs at 0.7175
- The aussie rallied on Tuesday with all eyes on the UDS elections.
- The market overlooks RBA’s dovish move.
Aussie’s rally from Monday’s lows at 0.6985 accelerated on Tuesday favoured by the positive market sentiment, boosting the pair to fresh three-week highs at 0.7175 before pulling back to 0.7140 area.
AUD rallies on risk appetite
The Australian dollar has surged on Tuesday amid a strong risk appetite, with all eyes on the US presidential elections. The investors seem to have shrugged off COVID-19 fears, to bet for a clear Democrat victory that would unlock the fiscal stimulus plan, ultimately undermining USD strength.
This favourable scenario has helped the risk-sensitive AUD to surge about 1.8% so far this week, unaffected by the dovish move of the Reserve Bank of Australia. The RBA slashed its benchmark interest rate to an all-time low of 0.1% earlier today and announced an AUD100 billion billion buying program.
Beyond that, the Bank has committed to expanding the quantitative easing program to contribute to the economic recovery after the impact of the COVID-19 crisis: Whether the Bank delivers more stimulus will depend on the unemployment outlook and market functioning over the following six months. If the RBA needs to do more, we believe it has more room to do so.”
Technical levels to watch
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