The AUD/USD is under pressure due to DXY strength and Australian lockup issues.
Fears about delta variants keep investors on edge, putting a damper on risk appetite.
Markets are waiting for the latest CB Consumer Confidence data and covid updates from the United States.
The purchasing appetite in the US dollar has continued unabated, sending the AUD/USD to new session lows near the 0.7500 level.
As of this writing, the Australian dollar is down 0.17 percent on the day, trading at 0.7553, after a late-Asian session spike to 0.7565.
The US dollar’s safe-haven demand remains unchanged, as investors remain concerned about the rapid spread of the Delta covid variant and its implications for global economic recovery. The hawkish Fedspeak also helps the greenback, as most US central bank officials ignore inflation fears and remain bullish about the US economy’s recovery.
Meanwhile, as half of Australia’s population is forced back under lockdown, Delta strain spreads throughout the country.
Brisbane became Australia’s fourth regional capital city on Tuesday, restricting mobility outside of houses for at least three days, except for basic reasons such as shopping and exercise, less than 24 hours after a similar action in Perth. Longer lockdowns of up to two weeks were announced over the weekend in Darwin and Perth.
The Reserve Bank of Australia (RBA) should retain its accommodative monetary policy since Australia has been unable to stop the rapid spread of the new variety, while sluggish vaccine deployment also poses a risk to the nation’s nascent economic recovery.
While waiting for further covid information, the pair will take cues from broader market sentiment and USD price behavior. The Consumer Confidence and Housing Data in the United States may also bring new trade impetus.
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