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Off session high after RBA’s Financial Stability Review

  • AUD/USD snaps three-day winning streak after RBA’s Financial Stability Review (FSR).
  • The bi-annual cited recently high uncertainty to weigh over the banks’ performance and economy.
  • Earlier during the day, comments from the US diplomats kept the risk-tone lighter.
  • US economic docket, virus updates will be observed for fresh impulse.

With the RBA’s FSR highlighting the coronavirus (COVID-19) risk, AUD/USD drops from the session high of 0.6250 to currently down 0.20% around 0.6220 amid Thursday’s Asian session.

The Financial Stability Report (FSR) signaled that the Aussie financial system was strong initially before the virus breakout. The bi-annual report also mentioned, “Heightened uncertainty related to the pandemic is compounding the usual volatility in financial markets.”

Read: RBA’s Financial Stability Review: Financial system was in a strong position heading into virus impacts, faces increased risks

Earlier during the day, upbeat comments from US President Donald Trump, concerning the economic re-start, as well as updates for the COVID-19 clinical trials, helped the risk-tone to extend the previous strength.

That said, the US 10-year Treasury yields drop one basis point (bp) to 0.75% whereas Japan’s NIKKEI marks 0.50% loss to 19,260. Even so, Australia’s ASX 200 remains 1.80% up to 5,300 amid hopes of further stimulus.

Although virus updates are likely to remain as the key catalyst, the US weekly Jobless Claims will also be the key due to its latest jumps based on the virus impact.

Technical analysis

Sellers await a clear break below 21-day SMA figures near 0.6050 for fresh entry while an area comprising March 09 low surrounding 0.6300/10 could restrict short-term recovery moves.

 

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