After making a dive of 47 pips in earlier exchanges, the AUDUSD currency pair is on a rebound. The US dollar is once more anticipated to pare its gains from the Australian currency as investors take in the day’s earnings reports. Trade sentiment has favored the riskier Aussie in the New York exchanges as the equities market carries the demand.
A report by CNBC.com’s JeeYeon Park states that “Stocks reversed earlier losses to close higher for a third-straight session Tuesday, with the Dow and S&P 500 extending their recent multi-year gains, ahead of a busy week of corporate earnings and amid hope for a deal on the debt ceiling.”
A day after markets were closed for Martin Luther king day, and following President Obama’s inaugural address exhorting the nation to rise up against the political deadlock in the nation’s capital that could frustrate his second-term efforts, stocks continued to hike. The nascent corporate earnings season is seen to buoy demand for risk. Today, the following are scheduled to report their fourth quarter financial data: McDonald’s, United Tech, Abbott Labs, Coach, WellPoint, Amgen, Apple, F5 Networks, Netflix, Sandisk, Symantec, and Western Digital.
Meanwhile, in the debacle over the debt ceiling, House Speaker John Boehner indicated yesterday that Republicans will vote on an extension of the federal debt ceiling to allow Treasury to borrow money until mid-May. White House spokesman Jay Carney indicated that the president would likely sign the measure if the Congress passes it.
In the Land Down Under, the recent improvement in the global economic outlook, added to rising share markets, healthy house prices and improving confidence levels are seen to steady the Reserve Bank on reducing interest rates, according to Savanth Sebastian, an economist in Sydney at a unit of Commonwealth Bank of Australia. “The central bank is unlikely to want rates to get too far from normal unless conditions take a drastic turn for the worse.”
Considering market confidence, a short-term buy position is suggested for the AUDUSD today. However, be on the lookout for probable technical corrections.
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