AUD/USD trades steadily, close to four-month highs on Federal Reserve stimulus concerns

Australian dollar was trading steadily in proximity to its highest level in four months against the greenback on Monday, as expectations arose that the Federal Reserve Bank may delay the reduction of its monetary stimulus after the partial government shutdown.

AUD/USD touched a session high at 0.9679 at 4:45 GMT, also the pairs highest point since June 4th, after which consolidation followed at 0.9672, dipping 0.04% for the day. Support was likely to be received at October 18th low, 0.9605, while resistance was to be encountered at June 4th high, 0.9760.

After the experienced 16-day partial government shutdown in the United States, the US dollar remained still under pressure against major rivals amid concerns that Fed’s monetary policy will be strongly influenced. The Federal Reserve Bank will probably put off the first cut to its asset-purchasing program until March next year, according to the median estimate of 40 experts participated in a survey by Bloomberg, conducted on October 17th-18th. Before the shutdown in Washington global markets were expecting that the Federal Reserve will begin phasing out its asset purchases at its meeting on policy on October 30th, or in early December. Federal Reserve policymakers had pledged that since December a raise in the base interest rate would not be considered as long as the unemployment rate in the country exceeds 6.5%. The rate of unemployment remained at 7.3% in September, according to the median estimate in another poll. The US Labor Department will release its official report on October 22nd. This report has been initially scheduled for release on October 4th, as well as the highly anticipated non-farm payrolls.

Yield on the 10-year US Treasury bonds dropped to as low as 2.54% in New York on October 18th, the lowest level since July 24th, Bloomberg reported. At the same time, the yield on Australian 10-year government bonds dropped 4 basis points, or 0.04 percentage point, to reach 4.08% on Monday.

Meanwhile, the Aussie was higher against the euro, with EUR/AUD cross down 0.10% on a daily basis to trade at 1.4138 at 9:03 GMT. AUD/NZD pair was gaining 0.21% to trade at 1.1424 at 9:03 GMT. It became clear that in New Zealand permanent arrivals surpassed departures by 2 740 during September, marking the largest change since July 2003, according to Statistics New Zealand in its International Travel and Migration report. The seasonally adjusted net loss of 800 migrants to Australia in September was the lowest since September 2003.