AUD/USD climbs to fresh weekly highs above 0.7300
- AUD/USD is posting strong daily gains on Monday.
- RBA's Lowe says negative rates are extraordinarily unlikely in Australia.
- Risk-on market environment causes greenback to lose interest.
After closing the previous week virtually unchanged, the AUD/USD pair gained traction on Monday and advanced to its highest level since September 9th at 0.7326. As of writing, the pair was up 0.75% on the day at 0.7322.
Risk flows help AUD start week on strong footing
Earlier in the day, Reserve Bank of Australia (RBA) Governor Phillip Lowe said that negative rates as a policy option in Australia were still extraordinarily likely. "We would only consider negative rates if all the world's major banks had negative rates," Lowe added and these comments helped the AUD gather strength.
Additionally, the data from China revealed that Industrial Production and Retail Sales both expanded at a firm pace in October and provided an additional boost to the China-proxy AUD.
In the second half of the day, the positive shift seen in the market sentiment allowed AUD/USD to preserve its bullish momentum.
Moderna reported on Monday that its coronavirus candidate was 94.5% effective and triggered a risk rally. Major European equity indexes closed in the positive territory and Wall Street opened higher on Monday, making it difficult for the greenback to find demand as a safe-haven. As of writing, the US Dollar Index was down 0.1% on the day at 92.61.
During the Asian trading hours on Tuesday, the RBA will release the minutes of its November meeting, at which the bank lowered its policy rate to 0.15% and announced AUD100 billion worth of QE.
Technical levels to watch for