AUD / USD started the trading session trying to make a recovery movement from 0.6938 when taking around to 0.6950. The quote broke the previous several days of gains while reversing from 0.6998. However, the following recovery move from 0.6921 failed to last longer than 0.6979.
The rise of the coronavirus (COVID-19) in the global economy, including Australia, is reminiscent of fear trading and dragging the risk barometer the previous day. Also, the gloomy economic prospects of the RBA add to the weakness in the AUD / USD pair.
Whether it's a six-week lockdown in Melbourne and surrounding cities or US record-breaking virus figures, surpassing the three million mark, the global economy has recently been hit by a pandemic revival.
Also, Tokyo marks more than 100 cases for the fifth day in a row while the situation in India is also worrying. Instead, Beijing registered zero cases while also announcing a third vaccine trial in Brazil.
Elsewhere, the US-China struggle remained on the table with a recent announcement from US Secretary of State Mike Pompeo who declared visa restrictions for some Chinese officials in Tibet.
Expected stimulus for the AUD USD pair
Furthermore, China maintains its strong stance against the United States and Britain in opposing the ban on Huawei and fighting against Hong Kong's security laws. Amid all this floating news, Wall Street's rise stalled after a good performance the previous day while the 10-year US Treasury yield also reviewed the sub-0.65% area, down 44 basis points (bps).
It should also be noted that the Reserve Bank of Australia (RBA) announced no change to a record low-interest rate of 0.25% and previously announced Quantitative Easing (QE) during the July monetary policy meeting. However, the central bank cites economic concerns, because of the deadly disease.
Earlier the AUD / USD pair was still likely to strengthen around 0.6975, investigating resistance from the direct trading range, at the beginning of the Asian session on Tuesday. Hopes of further stimulus and optimistic performance by Chinese equities initially sparked market optimism during yesterday's trade.
The positive-trading mood gained an additional atmosphere when Australia TD Securities Inflation and ANZ Job Advertisements for June came out stronger than expected -1.2% and -0.3%, MoM, to + 0.6% and + 42 respectively 0%.
The US ISM Non-Manufacturing PMI jumped back into expansion territory, with an estimate of 57.1 versus 50.1, in June also brightening the mood. Conversely, worsening coronavirus (COVID-19) conditions in the US and parts of Australia, including Melbourne, tame optimism.
Policies to be Conducted by the Aussie Government
In response, China 's Global Times (GT) recently released news that suggested the third trial of a vaccine in Brazil developed by Beijing. The Naga state's harsh attitude towards Canberra, because it prompted an investigation into the spread of the virus, prompted the market to rethink the Australian-Chinese trading partner.
On the other hand, the US President withheld sanctions over Hong Kong's security legislation, but the White House suggested several more punitive measures. Against this background, Wall Street welcomed US traders, after the Friday holiday, with a big smile and the NASDAQ's rise to record highs.
Also illustrating optimistic sentiment is the yield on the 10-year US Treasury, which is close to 0.7000 with almost two basis points of increase.
Furthermore, today's monetary policy meeting by the Reserve Bank of Australia (RBA) is key even if the Aussie central bank is not expected to change current interest rates or bond purchases.
It should be noted that there are no major data/events from the US, except for the JOLTS Job Opening for May, which is expected to be 4.85 million versus 5,046 million, which in turn can keep viruses and news related to China from the attention of market participants.
