The aussie remained gently offered last week and this can actually be considered a sign of resilience of the currency, in the view of economists at ING. Looking ahead, the worrying covid situation in Australia is set to weigh on the AUD/USD pair. 

Hard to see any material improvement in the aussie

“Along with a worsening sentiment in Asia and in China in particular (to which AUD has a high beta), Australia is facing its worst covid crisis so far, with major cities having to enter or extend lockdowns.”

“The fact that only 16% of the population in Australia has been fully vaccinated argues against a quick resolution to the current epidemic crisis.”

“Iron ore prices have continued to drop and have now reached the $130/MT level, close to 5-month lows.”

“Along with the RBA minutes on Tuesday, we will see July jobs data on Thursday. Any signs of a less dovish RBA in the minutes or another marginal drop in unemployment may give little help to AUD as they would both be seen as outdated considering the material worsening of the COVID-19 situation in Australia in August.”

 

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