AUD/USD bears keep 0.6870 on radar on RBA Statement of Monetary Policy, China inflation, US data in focus
- AUD/USD remains pressured around intraday low, defends latest pullback from weekly low.
- RBA SoMP signals that mindful of rise in interest rates already made, policy acts with a lag.
- US Treasury bond yields triggered recession fears and weigh Aussie pair as well.
- China CPI, early signals of the next week’s US inflation data will be crucial for immediate directions.
AUD/USD struggles for clear directions amid mixed signals from the Reserve Bank of Australia’s (RBA) Statement of Monetary Policy (SoMP) during early Friday. Adding strength to the risk-barometer pair’s inaction could be the cautious mood ahead of early signals for the US inflation, as well as China’s Consumer Price Index (CPI) and Producer Price Index (PPI) data for January.
That said, RBA SoMP revised Aussie economic forecasts and cited the need for further interest rate hike. However, the statements like the board is mindful of rise in interest rates already made and that the policy acts with a lage seemed to have probed the AUD/USD bulls afterward.
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Elsewhere, US Treasury bond yields grind higher after renewing the recession woes the previous day, which in turn exert downside pressure on the AUD/USD prices. It should be noted that the difference between the US 10-year and 2-year Treasury bond yields turned the widest since 1980. It’s worth noting that both these key bond yields remain mostly inactive around 3.66% and 4.50% respectively by the press time.
On a positive side, US President Biden’s taming of fears emanating from the US-China jitters, following the China balloon shooting by the US, joined the hopes of People’s Bank of China’s (PBOC) rate cuts and the restart of the China-based companies’ listing on the US exchanges to put a floor under the AUD/USD price. Additionally challenging the Aussie pair sellers were comments from
Technical analysis
Multiple failures to cross the 21-DMA hurdle, around the 0.7000 round figure, directs AUD/USD towards the 50-DMA, around 0.6870 by the press time.