- AUD/USD probes a five-day winning streak.
- The US dollar takes clues from the spike in coronavirus cases, making the world leader, as well as Jobless Claims.
- US Fed Chair, Treasury Secretary tried to placate traders.
- The economic calendar is light in Asia, US data, House votes on the US COVID-19 Bill will be the key.
AUD/USD defies the previous five-day rise, also stepping back from an eight-day top, while taking rounds to 0.6050/55 at the start of Friday’s Asian session. The Aussie pair earlier cheered broad US dollar weakness amid the surge in the coronavirus (COVID-19) outbreak in the US as well as a spike in the US Jobless Claims. That said, the recent pullback seems to lack a major catalyst than just an early-day risk reset as the greenback continues to remain weak.
With above 81,000 virus cases, as per the New York Times, the US becomes the world’s most infected nation, while overtaking China, from the disease. Earlier, the calls of the widespread outbreak and the further spread of the pandemic into the world’s largest economy weighed on the greenback.
The US Jobless Claims that skyrocketed above 3.0 million for the week ended on March 20 is, in our opinion, contributed a less to the greenback’s weakness. The reason could be traced from the previous expectations of even a larger number as well as the change in policies concerning who can apply for the unemployment benefits.
It’s worth mentioning that the US Senate’s ability to pass 2.0 trillion worth of aid package as well as the Fed Chair’s signal that the bank can unlock a plethora of funds if needed helped the US equities to register the third day of gain in a row. Further, US Treasury Secretary Steve Mnuchin turned down the calls of availing market break while suggesting a shorter trading period could be preferred even if it is not his preference.
The market’s risk-tone remains positive with Wall Street benchmarks extending recoveries while the US 10-year treasury yields trimming the previous day’s losses to revisit 0.85% mark.
Given the lack of major data on the Asian economic calendar, investors will keep eyes on the coronavirus headlines while waiting for the US House voting on the bill that passed the Senate on Thursday. Additionally, the US Michigan Consumer Sentiment will also be important to watch during the later part of the day.
Unless declining back below 0.5800, AUD/USD is likely extending the recovery moves towards 21-day SMA near 0.6230.