- Aussie's uptrend capped at 0.6800; the pair retreats to 0.6720.
- Market mood sours on concerns about COVID-19 infections in China.
- AUD/USD remains within recent ranges with the market focused on US data.
The Aussie is set to cap a four-day uptrend on Thursday, as the pair turned lower from one-week highs at 0.6800 and has extended losses to test week lows at 0.6720 in the early European session.
Concerns about COVID-19 in China dampen risk appetite
The sharp increase of coronavirus infections in China has curbed hopes about the economic recovery of the Asian dragon, crushing the moderate optimism observed in the first half of the week.
The major Asian markets have closed Thursday’s session in the red, and European indexes are following suit posting losses between 0.17% in Frankfort and a 0.62% decline in London.
COVID-19 cases have surged in China since the Government relaxed its Zero-COVID policy, and are overwhelming the country’s healthcare system in a wave that is threatening to extend from urban to rural areas as many citizens will travel to celebrate the lunar year. with their families.
In this context, many countries are considering introducing a covid test for travelers from China. The US has already announced the mandatory tests from January 5 and Italy is considering the same measure after half of the travelers arriving on a flight from China tested positive for Coronavirus at Milan’s Malpensa Airport on Wednesday.
The sentiment-linked Aussie has been hit by the souring mood and investors’ concerns about the consequences for China’s Economic growth. In a thinned post-Christmas market, however, the pair remains within recent ranges on Thursday with the focus on the US initial jobless claims and oil stocks figures, due later today.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD battles 1.0700 amid calmer risk tone, German ZEW eyed
EUR/USD is juggling in a narrow range just above the 1.0700 level in early Europe. The pair is sidelined amid a relatively calmer risk tone and a pause in the US Dollar decline. Markets digest the latest global banking sector developments ahead of Germany's ZEW survey.
GBP/USD remains pressured around 1.2250 as US Dollar recovers
GBP/USD is on a corrective move lower while testing 1.2250 in the early European morning. A broad rebound in the US Dollar is weighing on the pair, despite a better market mood. Investors stay cautious amid the global banking woes and ahead of the Fed decision.
Gold lingers below the $2,000 mark as the market awaits Fed’s policy decision
Gold price reached a fresh yearly high on Monday this week, with XAU/USD hitting the $2,000 mark for only the third time in recorded history; the last time was during the COVID era. The robust bull run began from the March low of around $1,800, and gold prices have not looked back since.
Coinbase argues core staking services are not securities in its letter to SEC
Coinbase submitted a comment letter to the US financial regulator asking for clarification on core staking services. The exchange explained that staking services fail every single prong of the Howey test, therefore, cannot be treated as securities.
FX thoughts for the week
Do central banks face a conflict between their inflation mandate and financial stability? The markets are still grappling with this question and confidence in the financial sector has not fully recovered. For now, central banks are responding with a conditional no.