21st December 2021 - AUD/USD bears target 0.7100 as US bond yields rise amid risk aversion


Market Headlines

The weakness on Wall St continued overnight with all three equity indices falling ~1.4-1.5%. The weakness seemingly driven by lower volumes, the surging omicron cases, and the resultant restrictions ahead of the holiday period. US interest rates were unchanged but the volatile trading conditions in oil remained as it fell a further 4% to $68 a barrel. USD/TRY fell a huge 30% on new currency measures including direct quoting from the CBRT to exporters. Developed markets currencies were relatively subdued including the AUD/USD which settled at 0.7115 after trading in a 0.7082/.7133 range.


Overnight Currency Range

AUD/USD 0.7082 0.7133

EUR/USD 1.1235 1.1304

GBP/USD 1.3175 1.3243

USD/JPY 113.33 113.71

NZD/USD 0.6705 0.6750

USD/CAD 1.2886 1.2963

USD/CNH 6.382 6.3901

AUD/JPY 80.24 81.14

AUD/NZD 1.0565 1.0602


AUD Thoughts

In Australia, the minutes of the December RBA Board meeting may provide more detail on the options the Board discussed with respect to the future of the Banks bong purchase programme. However, Governor Lowe last week already outlined the three options, and broadly speaking the conditions that need to be met for each path forward. The very strong labour market report for November is the first domino to fall into place and the board will now keenly await more labour market data, the Q1 CPI print in late January and information on both the Omicron variant and impact on activity from the current surge in COVID cases in Australia.


AUD/USD traded in a 0.7082/.7133 range to start the week but ultimately finished unchanged on the day. Demand remains ahead of 0.7100 and again ahead of 0.6995 while offering interest is staggered above 0.7200


Event Risk Data Today

AU – Dec RBA Minutes of Dec. Policy Meeting

CA – Oct Retail Sales m/m

EU – Dec Consumer Confidence

GE – Jan GfK Consumer Confidence

Recent Posts

See All

Disclaimer

This material is provided by Navigate Global Payments (Navigate) ACN 615 699 888, AFSL 502711.  The material contains general commentary only and does not constitute investment or any other advice.  Certain types of transactions, like futures, options and high yield securities can be risky, and not suitable for all investors.  This information has been prepared without considering your objectives, financial situation or needs.  Please seek your own independent legal or financial advice before proceeding with any investment decision.  The information is believed to be accurate at the time of compilation and is provided in good faith.  Navigate does not warrant the accuracy or completeness of any information contributed by a third party. The information is subject to change without notice and Navigate is under no obligation to update the information. The information contained in this material are opinions of the author at the time of writing and does not constitute an offer, recommendation to act, a solicitation of an offer, or an inducement to subscribe for, purchase or sell any financial instrument or to enter a legally binding contract.  This information, including any assumptions and conclusions is not intended to be a comprehensive statement of relevant practise or law that is often complex and can change.  Past performance is not a reliable indicator of future performance. Any forecasts given in this material are predictive in character.Navigate Global Payments Pty Ltd nor its related parties or officers accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the information contained or related to this site.