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AUD/USD consolidates losses below 0.6100, risk aversion prevails

  • AUD/USD sellers catch a breath after two-day declines.
  • Aussie NAB Business Conditions/Confidence dropped, Moody’s lowers its outlook for the Australian banking system.
  • Coronavirus continues to take a toll on the global financial markets, S&P Futures surprise with an uptick despite drops in Asian shares, US Treasury yields.
  • US Jobless Claims will be important, virus update could keep the driver’s seat.

While defying the previous two-day losing streak, also ignoring the risk catalysts, AUD/USD pulls back from four-day low to 0.6085, up 0.10%, amid the early Thursday. Downbeat catalysts from home and abroad keep risk-tone heavy but the pair seems to cheer the uptick in the US stock futures.

Australia’s PM Scott Morrisson recently crossed wires while saying that the virus spread is slowing. Even so, the national leader cited worries concerning community transmission while suggesting the return of the Parliament on next Wednesday.

The global rating giant Moody’s Investors Services downgraded its outlook for the Australian banking sector from stable to negative, citing the “broad and growing scope of economic and market disruption from the coronavirus outbreak”.

Earlier, Australia’s first quarter (Q1) 2020 National Australia Bank (NAB) Business Confidence and Business Conditions flashed disappointing numbers. The Business Confidence data dropped to the lowest since the Great Financial Crisis (GFC) while testing -11 mark versus revised -2 prior whereas the Business Conditions also slumped from 8 previous to -4.

It should also be noted that the Australia and New Zealand Banking Group (ANZ) recently came out with the Q1 Job Vacancies for Australia. The number dropped 0.1% QoQ and 2.2% YoY versus the previous +1.2% and -1.5% respectively. “ The reference date for the survey was 21 February, before COVID-19 was declared a pandemic and when Australian cases were still relatively low. But there were material revisions to industry and headline data since 2017,” the report said further.

Elsewhere, the Fed announced additional measures, of a temporary nature, to help large banks combat the coronavirus in the US. The same seems to help the US stock futures while the US Treasury yields and Asian stocks bear the burden of virus-led pessimism.

Moving on, a lack of major data on the economic calendar will push traders to search for virus updates for fresh impulse. Though, US Jobless Claims will be the key to follow for near-term direction ahead of tomorrow’s US NFP.

Technical analysis

Tuesday’s top surrounding 0.6215 offers the key upside barrier for the pair whereas 0.5985 may check bears below 0.6000 round-figure in a case of further declines.


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