AUD/USD: PBOC rate cut fails to lift the Aussie dollar

• PBOC cut one-year and five-year borrowing costs, as expected. 
• AUD continues to track the broader market sentiment, which looks to have turned anti-risk.

AUD/USD continues to trade it the red under the 50-day average at 0.6344 after the China rate cut. 

The People's Bank of China (PBOC) reduced the one-year loan prime rate to 3.85% from 4.05% and the five-year rate to 4.65% from 4.75%. The central bank was expected to cut the borrowing costs the contain the economic fallout from coronavirus outbreak.

China's economy contracted 6.8% year-on-year in the first quarter, the official data showed last week. The contraction was bigger than the forecast for 6.5% and was the first since 1992. 

The Aussie dollar is not impressed by the PBOC's latest rate cut, possibly due to the risk-off tone in the financial markets. 

At press time, the futures tied to the S&P 500 are reporting a 0.57% drop, while the dollar index, which measures the value of the safe-haven greenback against majors, is reporting over 0.20% gains. Meanwhile, the US oil prices fell to nearly two-decade lows below $16 a few minutes ago. 

The risk-off in the equity markets could be associated with growing doubts over America's readiness to "open up" the economy. Notably, the US death toll due to the coronavirus (COVID-19) crossed 40,000 with over 744,000 infections, complicating President Trump's re-opening plans. 

Technical levels