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  • AUD/USD takes rounds to 36-month high following welcome data at home.
  • Australia’s Q4 Private Capital Expenditure grew past-market forecast and prior.
  • Aussie bond yields stay strong near May 2019 top, S&P 500 Futures print mild gains.
  • Rejection of reflation fears, vaccine news favor the bulls.

AUD/USD stays firm around 0.7975, easing off-late, during Thursday’s Asian session. The aussie pair recently benefited from Australia’s Private Capital Expenditure (capex) data for the fourth quarter (Q4). Also favoring the Aussie bulls is the risk-on mood that propels bond yields and equities at home and abroad.

Australia’s Q4 Private Capital Expenditure crossed not only crossed 0.0% forecast but also reversed the previous -3.0% contraction with a +3.0% figure during the latest release. This suggests the Pacific major is up for a strong recovery following its dull days due to the coronavirus (COVID-19).

Read: Australia Private Capital Expenditure Q4 3.0% vs est 1.0%; prev -3.0%

While the data helped AUD/USD to defy pullback moves, near the highest in 36 months, upbeat market sentiment added to the pair’s performance recently. Behind the moves were headlines suggesting the Fed’s firm rejection of the reflation fears and any take on rate hikes as well as upbeat results of the covid vaccines. It’s worth mentioning that US President Joe Biden’s push for microchip buying also favors the mood.

That said, 10-year Treasury yields from Australia remain strong near the highest since May 2019, currently around 1.68%, whereas ASX 200 prints 0.90% intraday gains by press time. Further to portray the risk-on mood, the S&P 500 Futures rise 0.22% while extending the previous day’s recovery moves.

Given the light calendar and the market’s wait for Friday’s House voting on the US covid stimulus package, AUD/USD traders may witness a dull day. Though, bulls can remain hopeful in absence of any surprise.

Technical analysis

Unless breaking below the highs marked during October 2017 and March 2018, around 0.7900, AUD/USD is less likely to probe the rally towards the 0.8000 psychological magnet.

 

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