Forex News

06:25:26 29-11-2022

AUD/USD reclaims 0.6700 firmly as risk appetite regains glory, US ADP eyed

  • AUD/USD has recaptured the 0.6700 resistance as China announces stimulus to offset weaker economic projections.
  • A significant recovery in investors’ risk appetite has dragged the USD Index to near 106.20.
  • This week, US ADP Employment and Caixin Manufacturing PMI will be of utmost importance.

The AUD/USD pair has witnessed a sheer responsive buying action after dropping to near 0.6640 in the Tokyo session. The Aussie dollar has gained significant strength and has managed to push the asset above the round-level hurdle of 0.6700. Investors’ risk appetite has improved sharply as Chinese marshals are working on restricting protests from individuals against Covid-19 lockdown measures.

The US Dollar index (DXY) has dropped sharply to near 106.20 as the risk aversion theme is losing its grip quickly. Meanwhile, S&P500 futures have extended their recovery. The 10-year US Treasury yields have overstepped the critical hurdle of 3.70% amid anxiety ahead of the speech from Federal Reserve (Fed) chair Jerome Powell, which is due on Wednesday.

The speech from the Fed chair will provide cues about the likely monetary policy action in December monetary policy meeting. Also, it will trim obscurity over the chatters about a deceleration in the interest rate hike pace.

Apart from that, investors will focus on the release of the United States Automatic Data Processing (ADP) Employment data. As per the projections, the US labor market has been added with 200K fresh jobs vs. the prior release of 239K.

Meanwhile, the Australian Dollar has picked significant bids as China has announced fresh stimulus to offset concerns over economic projections due to fresh Covid-19 lockdown measures. Being, a leading trading partner of China, the fresh stimulus will also bring more business to the Australian economy.

Going forward, investors will keep an eye on Thursday’s Caixin Manufacturing PMI data, which is seen lower at 48.6 vs. the prior release of 49.2.


News provided by the portal FXStreet