Risk On Tone Drives AUD Higher In Early Asia

AUD: RBA Governor Lowe spoke before the Parliament Economic Committee; his comments reaffirmed the view around negative rates and highlighted unemployment as a key risk.

• AUD/USD pushes to session highs despite a fairly benign set of opening comments from RBA Governor Lowe. Pair last up around 0.18% at 0.7376, we saw levels as low as 0.7342 during the US session but this is still only around 60 pips shy of the highest levels of 2020.
• Risk on tone is evident in Asia with most equity indices indicated higher after US stocks pushed to fresh records, as the optimism behind the November market rally extended into a new month.
• A few other factors supporting risk on tone in Australia are a 2% jump in gold prices, and a positive assessment on the domestic economy from the OECD who expect a 3.2% rebound in 2021 GDP figures.
• Markets look ahead to Australian GDP data later in the session (00:30GMT/11:30AEDT), the headline quarterly figure is expected at 2.5%, after a 7.0% decline previously.
• MNI technical highlight 0.7407 as the next resistance, the November 30 high, above that 0.7414 is the September 1 high and a key bull trigger. The pair has a positive outlook with a bullish trend sequence of higher highs and higher lows still dominating.