Australian dollar inched higher against the American dollar during Tuesday Asian session. Optimistic comments from CBA Analysts and diminishing fears on Omicron variant favored the Aussie.
Analysts at Commonwealth Bank of Australia (CBA) offered an optimistic outlook for AUD/USD. “The Aussie dollar is expected to rise over 2022 to reach US78-80 cents by the December quarter on the expectation that the Reserve Bank starts to ‘normalize’ interest rates.”
“A key uncertainty could be the outcome of the Federal election due in May. While the opposition Labor Party is currently well ahead in most opinion polls, a tight result or even a ‘hung’ parliament could potentially impact investor sentiment. But a center-left government, as evidenced in the US, could see a big boost to government spending.”
Elsewhere, Recent studies from South Africa and the UK showing fewer odds of hospitalization due to the Omicron covid variant helped in diminishing market fears from the South African covid variant and in turn allowed the traders to turn towards the riskier asset – AUD.
Further, Ongoing talks over Iran’s denuclearization and a global push for peace between Russia and Ukraine also seem to have favorable impact on the trader’s sentiment. Moreover, news that the US Centers for Disease Control and Prevention (CDC) reduced the isolation and quarantine period for the general population added to the bullish bias for the AUD/USD quote.
Aussie was also favored by an uptick in Evergrande stocks on weekend news saying, the troubled China real-estate company resumed construction on nearly all of its projects with eyes on completing thousands of apartments before 2022 arrives. The stock jumped 10% initially before easing to $1.57, up 6.08% at the latest. The recent pullback in the quote could be linked to cautious sentiment ahead of two dollar-bond-coupon payments, due on Tuesday.
AUD/USD 4 Hour Chart:
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