AUD/USD jumps above 0.5800 as USD weakens on Fed's expansion of QE
- Fed announces new aggressive monetary policy measures to weigh on USD.
- US Dollar Index slumps below 102 in American session.
- Coming up: Commonwealth Bank PMI figures from Australia.
The AUD/USD pair gained traction in the last hour and added more than 100 pips as the USD came under heavy selling pressure on the Federal Reserve's aggressive measures to confront disruptions to the economic activity. As of writing, the AUD/USD pair was trading at 0.5829, up 0.35% on the day.
DXY turns south in early American session
The risk-off environment and the broad-based USD strength weighed on the pair at the start of the week. However, the Fed expanded its QE and said that will introduce a new program called "Main Street Business Lending" that will extend credit to small-and-medium-sized businesses to allow markets to take a sigh of relief.
Furthermore, the Fed said that it will be purchasing an additional $75 billion of treasuries and $50 billion of agency mortgage-backed-securities each day this week.
With the initial market reaction, the US Dollar Index (DXY), which tested the 103 handle earlier in the day, fell sharply to reflect the broad USD weakness. As of writing, the DXY was down 0.04% on the day at 101.92.
During the early trading hours of the Asian session on Tuesday, the Commonwealth Bank's Manufacturing, Services and Composite PMI readings will be looked upon for fresh clues regarding the impact of the coronavirus outbreak on the Australia economy.
Technical levels to watch for