After RBA’s quarterly Monetary Policy Statement, the AUDUSD picks up bids to renew intraday high.
The AUDUSD currency pair is still in the lead as it increases bids to renew its intraday high early on Friday around 0.6580. In doing so, the Australian dollar and the Australian dollar pair applaud a decline in the US dollar and Treasury bond yields. As well as the hawkish messages from the Reserve Bank of Australia’s (RBA) quarterly Monetary Policy Statement (MPS).
RBA MPS lowers growth and inflation projections while indicating the need for additional rate increases.
RBA MPS’s suggestion that more tightening was necessary reaffirmed the Aussie central bank’s hawkish slant. Forecasts for end-of-2023 GDP growth and inflation are trimmed, most Others have barely altered,” the RBA statement stated.
In addition to the RBA’s actions, the AUDUSD pair prices are supported by anticipation of a stimulus from China. After People’s Bank of China Governor Pan Gongsheng was seen meeting with major Chinese real estate investors. And promising to support the housing sector. It’s important to note that the PBoC Governor and China’s state planner will meet on Friday.
In other news, Reuters’ report that a leading Republican wants Biden to impose significant limits. On US assets in China prompts Aussie pair buyers ahead of the US employment report.
In spite of the slowing markets, the US dollar and yields support the recovery of the Australian dollar.
Although the US Dollar Index (DXY) and US Treasury bond yields have declined. The AUDUSD to continue strengthening after recovering from a two-month low the day before.
In the midst of these maneuvers, S&P500 Futures post modest gains. While US Treasury bond rates continue to trade at a multi-day high, both of which encourage US Dollar buyers. However, while the Wall Street benchmark had slight losses by the end of Thursday’s North American session, the US 10-year Treasury bond yields reached its highest level since November 2022 before closing the day’s trading near 4.18%. It’s important to note that the US bond yields were approaching the unsettling levels that had previously led to financial difficulties, which in turn teased the US Dollar bulls because to the currency’s attraction as a safe haven.
In the future, AUDUSD may continue its corrective bounce before the US jobs data. However, the headline Nonfarm Payrolls (NFP) indicates that market expectations are pessimistic and that it would likely soften to 200K from 209K previously, which could prompt US Dollar bulls in the event of pessimistic prints. In addition, the unemployment rate is probably going to stay at 3.6%.
Technical Outlook
AUDUSD was recovering from an upward-sloping support line from October 2022, around 0.6540, amid a practically oversold RSI (14) line, which further supports a corrective bounce off the Aussie pair toward the bottom of late June, at about 0.6600.
