- AUD/USD refreshes multi-day top, reverses previous day’s losses.
- Market sentiment improves on easy covid numbers, receding odds for monetary policy adjustments.
- China PMI disappoints, Australia macro came in mixed but virus updates are the key.
- US Consumer Confidence, Aussie GDP eyed ahead of US NFP.
AUD/USD takes the bids to 0.7322, up 0.24% on a day to refresh the highest levels since August 17 heading into Tuesday’s European session. The Aussie pair portrays the broadly risk-on mood, led by the easy covid numbers and fewer challenges for the current monetary policy, to renew the two-week high.
Daily coronavirus numbers from Australia step back from record top to sub-1,300 level as the most populous state New South Wales (NSW) reports 1,164 infections.
Not only in Australia but the easy virus numbers New Zealand and the UK also weigh on the US dollar’s safe-haven demand and favor AUD/USD bulls.
It’s worth noting that the recent comments from the Fed policymakers, latest by Cleveland Fed President Loretta Mester, copy Fed Chairman Jerome Powell’s cautious optimism and reject fears of a rate hike, which in turn heavy the greenback.
Alternatively, China’s official PMI figures for August came in quite disappointing but the Aussie economics pare losses with the mixed outcome. That said, Australia TD Securities Inflation for August rose past 0.4% (revised) to 0.5% MoM in August whereas Building Permits dropped below -6.7% previous readouts and -5.0% expected to -8.6% in July. Additionally, Australia's Current Account Balance for the second quarter eased below 21.0 billion forecast to 20. Billion.
Against this backdrop, the US 10-year Treasury yields drop for the third consecutive day to 1.278% at the latest whereas the S&P 500 Futures print mild gains around the record top.
Moving on, US CB Consumer Confidence figures may direct short-term AUD/USD traders, likely towards further north, ahead of Wednesday’s Aussie Q2 GDP figures. Above all, US Nonfarm Payrolls (NFP) for August will be the key to follow.
Read: Conference Board Consumer Confidence August Preview: Negative dollar risks
Technical analysis
Despite staying above 20-DMA, around 0.7295, AUD/USD bulls seek a daily closing beyond a three-month-old resistance line near 0.7310, to retake controls.