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AUD loses bids as news and data worsen

2 min read

Forex news for Asia trading on
Wednesday
21
July 2021

The
Australian dollar was the session’s biggest loser as a steady drip-feed of bad news and data weighed. Australia’s largest and
second-largest population cities
and
states both saw a rise in new coronavirus cases in the preceding 24
hours despite both being in lockdown. This comes against the
background of Australia being at the bottom of the list amongst OECD
countries for vaccination rate, 38th
out of 38. The rate is expected to accelerate in the coming months as
more Pfizer vaccines come
into the country. On the increase in cases, 110 in NSW and 22 in
Victoria; Victorian authorities tried to cushion the result reasoning
all new cases were traced to existing cases.

Further,
around 50% of Australia’s population is now in lockdown. Data for
retail sales in June, when lockdowns were not nearly so widespread
came in much worse than expected (-1.8% m/m vs. -0.5% as the median
estimate), so as the
number of shut-ins has increased so a worse result is expected in
July.

AUD/USD
traded down from highs circa 0.7340 to approach its overnight low
around 0.7300 and while there are bids ahead of the figure it has not
bounced (as I update). It looks ugly. 

NZD/USD
is down a few points with AUD, not nearly as much. While New Zealand
is seeing no new cases and the RBNZ is expected to hike soon to
address rapidly rising inflation the Australian experience is a
pointer to the risk NZ does, still, face.

EUR,
GBP, CAD have all lost a little against the USD. Regional equities
steadied following the good lead from Wall Street on Tuesday. 

Forex news for Asia trading onWednesday21July 2021




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