AUD/USD: Unimpressed by the Aussie stimulus, registers four-day losing streak
- AUD/USD remains on the back foot amid coronavirus-led pessimism.
- Aussie PM announces the two-year package worth the Australian dollar 22.98 billion.
- Eyes on US PM Donald Trump’s stimulus plan.
AUD/USD fails to react positively to the Aussie PM Scott Morrison’s heavy stimulus while declining to 0.6475 during the Asian session on Thursday. The likely reasons for the pair’s absence of positive moves after the news could be traced to the market expectations that policymakers are lagging in efforts to counter the deadly coronavirus (COVID-19). It should also be noted that the upcoming announcement of stimulus from US President Donald Trump is another catalyst weighing on the pair.
Having announced a minor health package the previous day, Aussie PM Morrison availed the opportunity to respond to the deadly virus with nearly 23 billion Australian dollars worth of stimulus that will prevail for two years.
Read: Australian PM Morrison: Fiscal stimulus measures Worth A$17.7Bln
It should also be noted that Australian Treasurer Frydenberg also announced that the 11 billion worth of stimulus will be dispersed before the end of June.
Even so, the Aussie pair remains mostly under pressure considering the efforts as inefficient to tame the negative implications of the disease.
Earlier, the Aussie bond yields drop amid the COVID-19 pessimism while news of the rising numbers and Italy’s directions to doctors drove the quote. Further, news that the CME will close its floor trading from Friday and there are likely many cases than the official numbers in the US weigh on the risk-tone. As a result, NIKKEI opens with more than 2.0% drop to 19,045.
Traders will now keep eyes on the US President Donald Trump’s stimulus measures for immediate direction.
Technical Analysis
February-end low surrounding 0.6430, followed by 0.6400 round-figure, can offer intermediate halt during the pair’s gradual weakness towards the early-week bottom near 0.6310.