- AUD / USD consolidates from recently reached four-week high.
- The general weakness of the US dollar, amidst Fed action and optimistic data / comments, helped the Australian.
- Australian / US markets are closed for Good Friday, Chinese markets are up with March inflation data on the cards.
AUD / USD remains above 0.6300, despite falling from the monthly high of 0.6363 to around 0.6330 at the start of Friday’s Asian session. While the general weakness of the US dollar could be seen as the reason for the pair’s previous upward movements, the latest decline could be attributed to fears of the coronavirus.
Fedell Powell and Jobless Claims have successfully undermined the greenback…
Unfavorable comments from the chairman of the Federal Reserve, Jerome Powell, and another six million figures from the weekly Jobless Claims were enough for the markets to pay some attention to the Fed’s surprise action.
Fed Chairman Powell may be the first central banker among the first to suggest that the US economy is headed for very high unemployment. The fact received support from the latest weekly jobless claims which exceeded forecasts by 5,250,000 with 6,606,000, while revising upward the previous one to 6,867,000 from the originally published figures of 6,648,000.
The Federal Reserve (Fed) surprised the markets with additional measures to help medium-sized businesses while using the $ 2.3 trillion in loans already announced to support the economy.
Amidst all of this, the US dollar continued to bear the brunt of the coronavirus crisis and optimistic data while marking widespread losses. The same thing helped the Australian to forget the losses at the start of the day on the optimistic home database and the concerns spread by the RBA (Financial Stability Review) semi-annual report.
Despite this, the risk tone of the market posted mixed results as yields on 10-year US Treasuries closed the day on the negative side at 0.73%, while Wall Street posted another daily positive close with DJI30 at the highest monthly.
Given the absence of Australian traders, due to the Easter break, the pair could witness a lack of liquidity before the opening of Japan and China. However, the Chinese consumer price index (CPI) for March will be the key to watch as it includes the month of the coronavirus crisis. The overall CPI should soften from 5.2% to 4.8% year-on-year while the MoM figures suggest more weakness at -0.7% against + 0.8% for previous surveys. In addition, the producer price index (PPI) could also fall to -1.1% against -0.4% the previous brand.
The 50-day SMA near 0.6387 becomes the main upward barrier holding the doors for the further rise towards 0.6400. Alternatively, sellers will look for entries below the late March high of 0.6215.