AUDUSD recovers amid mixed headlines, US holiday

AUDUSD extends the previous day’s corrective bounce off a six-week low amid Monday’s dicey markets. The risk-barometer pair prints mild gains despite multiple challenges to sentiment, mainly from China and North Korea. The reason could be linked to an absence of traders from the US and Canada.

Elsewhere, Brent oil prints the first positive day in six while Gold price also prints mild gains amid the market’s consolidation mode. It should be noted, however, that the US stock futures print mild losses whereas stocks in the Asia-Pacific region trade mixed.

Most of the other major currencies and commodities remain mostly unchanged to their previous day’s closings while cryptocurrencies print mild gains around the multi-month tops marked in the last week.

Following are the latest moves of the key assets:

• Brent oil snaps five-day downtrend as bulls keep the reins above $83.00.
• Gold defends the previous day’s rebound from a six-week low near $1,840-45.
• USD Index drops for the second consecutive day while extending the previous day’s pullback from a 1.5-month high.
• Wall Street closed mixed but equities in the Asia-Pacific region, as well as the shares in Europe and the UK, trade mildly positively as of late.
• BTCUSD and ETHUSD remain firmer around $24,500 and $1,700 amid sluggish markets and the US dollar pullback.

Traders lick their wounds amid inactive markets

Not only the US and Canadian holidays but a light calendar in the Asia-Pacific region also restricts the market’s move on early Monday. As a result, the US Dollar pares recent gains and allows the major currencies to grind higher.

That said, the People’s Bank of China’s (PBOC) inaction raised hopes of more easing from China even as the Sino-American tensions joined North Korea’s missile firing.

Expectations that the Reserve Bank of Australia (RBA) may defend its hawkish bias despite mixed data to battle the Fed concerns seemed to have helped the AUDUSD, together with expectations of more stimulus from China.

Elsewhere, Gold seems to cheer its traditional safe-haven status amid the US Dollar’s retreat and an absence of traders from Washington. Adding strength to the metal’s corrective bounce could be the hopes of additional demand from China, due to the likely emphasis on easy money. 

Furthermore, chatters that Bank of Japan (BoJ) Governor Haruhiko Kuroda may play its last ball with all strength, before retiring in April, to defend the easy money policies seemed to have helped the market sentiment and weighed on the US Dollar.

It’s worth noting that the BTCUSD and ETHUSD defend their first weekly gains in three, mildly positive afterward, as traders lick FTX-led losses amid an absence of major regulatory announcements that could possibly restrict crypto expansion.

• Strong buy: USDJPY
• Strong sell: ETHUSD, GBPUSD
• Buy: USD Index, USDCAD, Nasdaq, EURUSD
• Sell: DAX, FTSE 100, gold, BTCUSD, AUDUSD

A lackluster day ahead

Given the off in major markets, as well as a light calendar, Monday is likely to be a dull day for the global bourses. Even so, the US Dollar’s move should be closely watched ahead of Wednesday’s FOMC Minutes and the second readings of the Q4 US GDP.

May the trading luck be with you!