Pay attention to the movement of the Australian dollar! “February 6 Highlights and Event Schedule”
Yesterday's general address by President Trump was as expected full of bragging, and the highlight was Speaker of the House Nancy Pelosi (Democrat) tearing up the speech manuscript while listening behind Trump.
Also, early this morning it appears that President Trump's impeachment trial concluded with an acquittal.
The Iowa Democratic caucus is showing only partial tallies due to counting troubles, with Biden lagging as anticipated and a tailwind for President Trump.
In addition, the spread of the novel coronavirus continues, but when reports of a specific antidote emerged, risk-off sentiment retreated rapidly.
◎ Today's Points of Focus
1) AUD
The Australian dollar will be notable from today through tomorrow morning.
In the morning today, retail sales, business sentiment, and the trade balance will be released, and tomorrow morning Governor Lowe’s semiannual congressional testimony is scheduled.
Yesterday's remarks by Governor Lowe and the recent RBA Board statement were neutral in tone, with dovish expectations causing a pullback.
If today’s economic indicators miss expectations or tomorrow’s testimony takes a dovish turn, the AUD may come under renewed selling pressure, so proceed with caution.
Also, the earlier news about a potential antidote for the novel coronavirus helped reduce risk-off and supported AUD gains.
However, questions remain about whether the antidote is a vaccine, a combination of existing drugs, whether trials are beginning, whether it will be an approved drug, and how quickly supplies can be prepared.
With unclear sources and with the effectiveness of the antidote and the virus’s spread not yet determined, the situation remains uncertain.
If antidote information proves to be misinformation or the virus continues to spread and deaths rise, risk-off could resume.
This drop would likely hit hardest for the AUD.
Today's and tomorrow's AUD moves and headlines deserve close attention!
2) USD/JPY
Today, options around 110 yen were observed, with sell orders beneath 110 yen appearing.
From the risk-on flare yesterday, USD/JPY rose to around 109.80 yen.
From here, 110 yen may present strong resistance.
Whether it can break through this level or be pushed back again is a key area to watch.
With employment data due tomorrow, activity is expected to be subdued, but if it moves beyond 110 yen, we could see a test of the January high around 110.30 yen.
With few major indicators, attention will be on stock prices, crude oil, gold, and statements by influential figures as well as the 110 yen fight.
◎ Today's Event Schedule
Thursday, February 6
09:30 AUD Australian trade balance, retail sales, NAB business confidence
10:30 JPY
17:00 EUR Lagardère ECB President remarks
23:00 EUR
Bank of France Governor Visco remarks23:15 USD
Kaplan, Dallas Fed President remarks (2020 voting)Friday, February 7
07:30 AUD Lowe RBA Governor remarks (semiannual testimony)
09:30 AUD RBA Quarterly Monetary Policy Statement
