AUD dips below 0.76 as short-term headwinds weigh on risk appetite.

Daily Currency Update

Price action across currency markets was largely muted through trade on Monday restricting the Australian Dollar to the lower bounds of recent ranges. The AUD bounced between intraday lows at 0.7595 and session highs at 0.7635 as investors appeared reluctant to extend positions amid vaccine uncertainty. Reports China’s Sinovac vaccine has just a 50% efficacy has prompted concerns across those countries reliant on the vaccine as part of their immunisation schedule. This coupled with the clotting concerns linked to AstraZeneca’s vaccine and the timeline to full recovery looks to be extending into 2022. COVID 19 deaths rose in the US for the first time in over a month while India struggles to control an outbreak that has swept the country. Despite sustained strength across equity markets and maintenance of an underlying positive bias through the long term, the extension in expectations and ongoing COVID-19 impacts have amplified short term risks and continue to weigh on AUD upside.
With little of note on today’s ticket we expect direction will remain largely range bound ahead of Domestic labour market data and US CPI and retail sales data on Wednesday and Thursday. Having broken below 0.76 US cents we are watching key support levels for any sign of a consolidated break below this handle.