- AUD / USD has risen from the day’s lows below 0.7500 to current levels just below 0.7550, but is still trading deep in the red.
- A big spike in iron ore prices and the improvement in the situation from the Covid-19 outbreak in Sydney have not helped the AUD much.
He AUD/USD it has continued its rally back towards the 0.7550 area after falling below the 0.7500 level earlier in the morning of the European session amid the widespread feeling of market risk. But the pair is still trading at around 1.0% losses on the day at 0.7530, in line with a broad sense of anxiety regarding the spread of this new variant of Covid-19 in the UK, which is said to be from up to 70% more transmissible and has already led to much of the UK country returning to strict lockdown measures. Much of the world has already moved to isolate the UK in order to prevent the spread of the new strain abroad, but it appears that it is too late in Europe, and cases have been found in Italy.
The latest Covid-19 news, combined with continued stagnation at the front of the Brexit negotiations, have contributed to a slight rally in the USD that has put rates like AUD / USD under pressure. Note that the dollar index (DXY) has fallen from highs above 91.00 in recent trading back below 90.50, facilitating the aforementioned recovery from the lows in AUD / USD towards 0.7550.
Covid-19 outbreak update in Australia
Australia already appears to be controlling its own Covid-19 outbreak; 15 cases were reported in Sydney on Monday out of 38,000 tests conducted, compared with 30 on Sunday, bringing the total number of cases to 83. Authorities warn that a one-day drop in cases is not cause for victory for the moment, but things seem to be going in the right direction. Nonetheless, Australian states have begun imposing entry bans on Sydney residents in a bid to keep the outbreak contained in New South Wales alone.
At this stage, AUD has not been particularly reactive to the news of this latest outbreak. Any outbreak is likely to have an effect on the Australian dollar, it would have to be at least on the scale of the outbreak in Victoria during the summer months, when GDP growth slowed substantially when the state was locked in for weeks and positive cases found. per day reached 100.
AUD ignores continued rise in iron ore price
Another rise in the price of iron ore futures on the Dalian Commodity Exchange during the Asia Pacific region has done little to help the AUD on the first trading day of the week, despite its strong positive correlation. In fact, the AUD / USD is currently trading lower by roughly the same amount as the NZD / USD, with both pairs down around 1.0%; a strong performance in iron ore prices would normally be associated with an outperformance of the AUD over the NZD.
Technical levels
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