- AUD/USD trades flat following the US President-elect Joe Biden’s stimulus speech.
- Aussie’s muted reaction suggests the stimulus announcement was in line with expectations.
- The pair remains at the mercy of action in the US bond yields.
AUD/USD is trading in a sideways manner near 0.7773 at press time, marking a weak follow-through to Thursday’s 0.60% rise to 0.7778.
The US President-elect Joe Biden unveiled the much-anticipated coronavirus stimulus plan early today, comprising $2,000 in stimulus cheques to Americans, social equity, infrastructure spending, and state and local government funding, and a potential minimum wage of $15 per hour.
However, Biden refrained from confirming the stimulus program’s size, which according to media reports released Thursday, is $1.9 trillion.
Biden’s stimulus talk has so far failed to elicit a reaction from AUD/USD and other currency pairs. The stimulus announcement was in line with the expectations built in the market place over the past week or so. That explains AUD/USD’s dull reaction.
The US bonds, too, are seeing little action, with the 10-year yield marginally weaker at 1.107%. The pair will likely face selling pressure if the yield ticks higher. The benchmark yield rose from 0.90% to 1.18% in the six days to Jan. 11, putting a bid under the greenback.
That said, the odds of yields witnessing a big move higher look weak, as Federal Reserve’s President Jerome Powell downplayed the risk of higher inflation and the need for QE taper on Thursday.
Technical levels
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