- AUD / USD continues to lose ground for the fifth day in a row on Wednesday.
- Covid-19 nervousness and disappointing Australian retail sales data weigh on the AUD.
- Sustained interest in buying the USD also contributes to the current downward movement.
The pair AUD/USD has fallen to fresh multi-month lows at the start of the European session on Wednesday, with bears now looking to extend the downside move below the 0.7300 level.
The pair has extended its recent downtrend and has witnessed some continuation sales for the fifth day in a row on Wednesday. The prolonged blockades in Australia’s two most populous states, Sydney and Victoria, continued to act as a headwind for the Australian dollar, which has been further pressured by disappointing macroeconomic data.
In fact, preliminary figures from the Australian Bureau of Statistics have shown that retail turnover in June fell 1.8% compared to the previous month. This marked the biggest drop in 2021 and further fueled concerns about possible economic consequences derived from the spread of the highly contagious delta variant of the coronavirus.
The data also projects a shadow on growth prospects in the third quarter amid the continued rise in COVID-19 cases and overshadowed a generally positive tone around equity markets. Apart from this, the sustained buying around the US dollar further contributed to the AUD / USD falling to the lowest level since November 2020.
The Growing Market Fears About New COVID-19 Outbreaks they have continued to shore up demand for the safe-haven USD and pushed away the perceived riskier Australian dollar cash flows. Indeed, the DXY dollar index is holding firm near three-and-a-half-month highs and, for now, appears unaffected by a further decline in US Treasury yields.
In the absence of major economic releases from the United States, events surrounding the coronavirus saga will play a key role in influencing USD price dynamics. Investors could continue to take cues from the broader market risk sentiment in order to seize some short-term opportunities around the AUD / USD pair.