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Forex News

AUD/USD keeps it above 0.6600 despite broad risk aversion, eyes on Aussie Retail Sales

  • AUD/USD remains firm above 0.6600.
  • The broad US dollar weakness seems to gain more attention from the Aussie traders.
  • Aussie Retail Sales, Fedspeak can decorate Asian session ahead of the key US NFP.
  • Coronavirus headlines continue to keep the driver’s seat.

AUD/USD remains defiant of the broad risk-off moves, mainly due to the coronavirus (COVID-19) spread, while rising 0.16% to 0.6613 amid the initial Asian session on Friday. While the risk barometer should ideally decline in times of market pessimism like currently, the US dollar weakness seems to have helped the quote off-late. Traders will now keep eyes on January month Australian Retail Sales for fresh impulse.

Coronavirus keeps spreading in the US, a lack of testing kits cited…

The deadly virus that emanated from China is making the lives of the west harder day by day. Seattle and King County registered 22 additional cases whereas New York doubled the count to 22 on Thursday. Further, California earlier announced a state of emergency while the UK marked its first death due to the disease. Even so, US Vice President Mike Pence recently admitted that currently they don’t have enough testing kits.

With this, the global traders turned additionally risk-averse and might have lost confidence in the US dollar that recently dropped to the multi-day low. However, the preference for the US bonds and gold seems to remain intact as the US 10-year treasury yields take rounds to the record low while gold also stays on the front foot near $1,672.

Global policymakers are doing what they can best with multi-billion dollars of stimulus and rate cuts from the key central banks like the Fed, BOC and the RBA. However, something more still needed to counter the pandemic. This pushes the Australia and New Zealand Banking Group (ANZ) to say, “Pressure for the Fed to act again in March is huge and we expect the ECB to act next week, while incoming BoE Governor, Andrew Bailey, could cut rates before the 26 March MPC meeting.”

It should also be noted that the recently released Australia AiG Performance of Services Index for February stood below 47.4 prior to 47.00.

Moving on, comments from the US Federal Reserve policymakers Neel Kashkari and John Williams will follow Australia’s seasonally Retail Sales for January, expected 0.0% versus -0.5% prior. Ahead of the Aussie data, Westpac said, “Bushfires and smoke pollution present a risk to trading volumes; however, the effects from COVID-19 shouldn’t appear until February.”

Technical Analysis

21-day SMA continues to limit the pair’s short-term upside around 0.6640 while the early-February lows near 0.6660 become an additional upside barrier to watch during the pair’s advances. On the downside, 0.6600 and 0.6550 could please the bears.

 

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