ForexLive Asia FX news wrap: AUD loses bids as news and data worsen

Author: Eamonn Sheridan | Category: News

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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