- AUD/USD struggles for direction after the pullback from the weekly top.
- US dollar recovers earlier losses amid a lack of major catalysts, coronavirus fears.
- Details about voting on COVID-19 Bill, US Jobless Claims and GDP will be the key.
AUD/USD has been trading in a small range between 0.5980 and 0.5950, currently around 0.5955, since the last few hours to the start of Thursday’s Asian session. That said, the pair slipped from the seven-day top of 0.6073 to 0.5930 during Wednesday’s US session.
The Aussie pair’s lack of momentum could be traced from the mixed bag of the latest catalysts as well as the light economic calendar.
While the US policymakers’ agreement on a $2 trillion aid package trimmed the US dollar’s safe-haven demand, coronavirus fears continue to keep the greenback on the front row of the buyers’ list.
News of multiple economies on the complete lockdown and the rising numbers of the pandemic keep exerting downside pressure on the market’s risk-on tone. However, the recent improvements in Italy, preceded by China, could be cited for a small relief.
Even so, Australia is struggling with the virus and trying hard steps to tame it. In the latest update, the New State Premier said he will not allow any passenger off cruise ships in Sydney unless new protocols are followed.
On the trade side, the Trump administration is considering a 90-day deferral for the tariffs on the global trade partners. Additionally, the US Department of Commerce recently postponed the public comment period for input on Huawei temporary general license extensions.
Amid all these, the market sentiment remains mostly upbeat with Wall Street posting the second day of gains while the US 10-year treasury yields also marking gains to 0.87% by the end of Wednesday.
Having gone through initial details of the $2 trillion COVID-19 Bill from the US, investors look forward to the Senate’s voting on the same, expectedly on Friday. However, the US weekly Jobless Claims, expected 1000K versus 281K prior as well as the fourth quarter (Q4) GDP, forecast to remain unchanged at 2.1%, will also be important to watch.
Despite failing to cross the mid-month low near 0.6080, the AUD/USD prices are above the 10-day SMA level of 0.5930, which in turn portrays the pair’s short-term strength.