AUD/USD struggles to extend Thursday’s again even as Biden goes big

• 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