AUD / USD defends 0.7000, prepares for RBA omissions, PBOC RRR falls in stronger yields
The AUD / USD rose slightly to 0.701015 during the Asian session on Monday, licking the wounds after the sharp daily decline since early May. Optimistic views on the Australian economy, expectations for a rate cut by the People’s Bank of China (PBOC), and tomorrow’s Reserve Bank of Australia (RBA) as Fed linked chatter dragged the Australian pair to new lows in 2021. Preparations recently police officers. Careful optimism in the market can be on the same line. Prior to the RBA meeting, Bloomberg released a poll stating that “The Reserve Bank of Australia is likely to be the last meeting of the year.”
On the other hand, ANZ said: “China’s Prime Minister Li Keqiang has promised the International Monetary Fund (IMF) to reduce the reserve requirement ratio (RRR) without specifying a date. Possible reconstruction by default.” In addition to RBA and PBOC chatter, optimistic printouts of second-tier data at home also supported the AUD / USD price. However, Australia’s TD stock inflation rate rose more than 0.2% to 0.3% in November, with ANZ job ads rising from 6.2% last month to 7.4%.
In addition, the hope of finding a cure for a variant of South Africa’s Covid known as Omicron is less dangerous than initially feared, adding to rumors that it has fueled market sentiment and AUD / USD prices increase. After first hitting Europe and the United Kingdom, the virus strains are strengthening their grip to reach major world countries such as the United States and China. However, it should be noted that scientists around the world are optimistic about treatments. Recently, senior US doctor Anthony Fauci has confirmed that Pfizer’s drug against Omicron is effective. Meanwhile, the news that chewing gum can contain the spread of the virus and the UK’s treatment efforts are also hopeful for distributors.
In addition, Australian Finance Minister Josh Frydenberg’s comment was positive for the AUD / USD rate. According to Reuters, policymakers may revise Australia’s 2022 GDP forecast during a mid-year budget update. It is noteworthy that prices fell sharply on Friday as the US dollar suffered a sudden drop in non-farm payroll (NFP) while trading the unemployment rate collapse. Expectations for the Federal Reserve’s rate hike were also raised by comments from President St. James Bullard. “We may consider raising interest rates before the cut is complete,” policymakers said. Wall Street’s benchmark closed negative, but Friday’s US Treasury 10-year yield fell about 10 basis points (bps) to 1.35%, the lowest level since late September. In the future, risk catalysts and pre-RBA sentiment could boost AUD / USD prices on a bright calendar.