In the midst of the second weekly drop, the AUD/USD pares recent losses.
Following the release of the FOMC minutes, bulls of the US dollar were questioned.
The Australian data was weaker than the US figures, and virus problems have worsened.
Lowe of the RBA will speak about the job market and monetary policy.
During the first Asian session trading on Thursday, the AUD/USD consolidates weekly losses around 0.7485-90, off recent lows. The Australian dollar has weakened in recent days due to the strong US currency, as well as concerns about the coronavirus (COVID-19) outbreak and the Fed’s next movements. Despite easing slightly, the FOMC Minutes were harmed by the current weakness in the quotation, as traders prepare for RBA Governor Philip Lowe’s address at 02:15 GMT.
Major policymakers remained concerned about the upside risk to inflation, according to minutes from the most recent Federal Open Market Committee (FOMC), although “considerable further work” needed to alter monetary policy was noted. As a result, the week’s much-anticipated event failed to deliver anything new, but it did tease US dollar bulls around a new three-month high following the announcement.
On the other hand, the covid crisis is intensifying as viral strains become resistant to vaccines and spread more quickly. Local lockdowns persist at home, despite recent softening in data. Nonetheless, according to ABC News, Australian health expert Catherine Bennett argues that many more Australians must be vaccinated before governments and territories can contemplate removing lockdowns to prevent outbreaks.
The risk-off sentiment keeps the US dollar index (DXY) rising, while US 10-year Treasury yields hit a new low since February. Equities, on the other hand, were encouraged by the Minutes’ lack of hawkishness and ended the day on a bullish note.
It’s worth noting that second-tier Australian data, such as the AiG Performance of Services Index, couldn’t match the benchmark of US economic strength, as shown by JOLTS Job Openings and FOMC minutes.
In the next days, AUD/USD traders will be watching for RBA Governor Lowe to reaffirm his cautious optimism from earlier in the week. If policymakers are hesitant to be enthusiastic about the Australian economy and continue to cite labor market problems, Aussie prices may face an additional weight in the south.
The ECB’s extraordinary meeting and weekly US Jobless Claims are two additional catalysts on the schedule to watch for new energy.
Sustained trading below a three-week-old resistance line and the 200-day moving average, respectively around 0.7500 and 0.7580, keeps AUD/USD bears on the way to last week’s yearly low under 0.7445. Any additional deterioration will be called into doubt by the August 2020 top near 0.7415 and the 0.7400 threshold./n
