- Australian Dollar (AUD) trades broadly flat despite an upbeat mood in the market
- RBA minutes in focus
- US Dollar (USD) declines on safe haven outflows
- FOMC in focus on Wednesday, no policy change expected
The Australian Dollar US Dollar (AUD/USD) exchange rate is holding steady on Monday, in a similar fashion to the previous week. The pair settled on Friday at approximately the same level that it opened the previous Monday, at US$0.7283.
At 13:30 UTC, AUD/USD continues to trade at these levels of US$0.7283, trading a very tight range.
The Australian Dollar is trading flat despite a risk on mood in the broader market. News that AstraZenca is allowed to restart its covid-19 vaccine trial after a brief pause last week is lifting spirits. The AstraZeneca covid vaccine candidate is widely considered to be one the of the most advanced and the best bets at beating coronavirus.
Additional updates from Pfizer’s chief executive pointed to a vaccine being available in the US before the end of the year.
Despite rising risk appetite in the market, Australian Dollar traders are preferring to stand on the side-lines ahead of the release of the minutes to the Reserve Bank of Australia’s latest monetary policy meeting.
Chinese retail sales due to be released overnight could also create some volatility for the Aussie Dollar, also known as a Chinese proxy.
The US Dollar is under pressure versus its major peers on safe haven out flows and as investors look ahead to the Federal Reserve monetary policy announcement on Wednesday. The Fed is not expected to adjust monetary policy this month. Investors will be looking for further cues over additional stimulus and the new average inflation target (AIT).
AIT means that the Fed is now willing to accept inflation running over the 2% target for extended periods of time to make up for the periods that inflation ran under 2%. This basically means that interest rates will be lower for longing, which is US Dollar negative.