AUD/USD spikes above 0.6800 on RBA Governor Lowe's remarks
- RBA's Lowe repeats further monetary easing may be required.
- Lowe also sounds cautiously optimistic about the outlook to help AUD gather strength.
- US Dollar Index stays in a tight range above 98.50.
The AUD/USD pair closed the first day of the week virtually unchanged near 0.6770 and stayed in a consolidation phase before spiking above the 0.68 handle on the back of Reserve Bank of Australia Governor Philip Lowe's remarks. The pair, which rose to a session high of 0.6806, was last seen trading at 0.6790, adding 0.25% on a daily basis.
RBA's Lowe provides a boost to the Aussie
Although Lowe repeated that the RBA's board was prepared to ease the monetary policy further if needed to support growth and employment, he also noted the economy has reached a gentle turning point. "Expecting a modest pick-up in economic growth in the quarters ahead led by low rates, tax cuts, weaker AUD, government spending," Lowe added to weigh on rate cut expectations and helped the AUD gather strength.
There won't be any significant macroeconomic data releases from Australia in the remainder of the week and investors are likely to refrain from making large bets ahead of next week's RBA meeting.
On the other hand, after closing the day modestly higher on Monday, the US Dollar Index stays relatively calm today and was last seen up only 0.03% on the day at 98.64. The Conference Board's Consumer Confidence Index and the Richmon Fed's Manufacturing Index will be featured in the US economic docket.
Technical levels to watch for