AUD/USD consolidates losses below 0.7000 as risk sentiment sours
- AUD/USD bounces off 0.6962 after posting the biggest losses in three weeks the previous day.
- Global markets remain dull as vaccine-led optimism fades amid escalating US-China tussle and mixed data.
- Aussie Unemployment Rate matched anticipated hike, Chinese Retail Sales and US Jobless Claims failed to please.
- A light calendar after a busy day, risk catalysts keep the driver’s seat.
AUD/USD seesaws around 0.6970 at the start of Friday’s Asian session. The pair has been choppy between 0.6965 and 0.6975 after stepping back from 0.6962 during the last hours of the US session. It’s worth mentioning that the quote marked the highest losses since June 24 on Thursday as the market’s risk-tone sentiment sours.
Nothing important except for fading optimism…
Starting from the Asian session, Thursday was a busy day for global market watchers. Though, no major data/events could offer any important insights than the fact that the global recovery is yet away. Also dimming the prospects were the Sino-American tension and rising coronavirus (COVID-19) figures.
The Australian jobs report for June flashed better than forecast Employment Change, to 210.8K, coupled with a higher than previous 7.1% Unemployment Rate of 7.4%. On the other hand, China’s second-quarter (Q2) GDP rallied above market consensus to 11.5% on QoQ, Industrial Production also rose beyond 4.7% expected to 4.8%. However, Retail Sales slipped past-0.3% forecast to -1.8%. Elsewhere, the US Retail Sales surged 5.6% with a rise in Initial Jobless Claims. Hence, there were a plethora of figures but all of them failed to offer any clear direction.
Talking about the risks, the US is considering sanctioning top-tier Chinese policymakers, as per the New York Times, which in turn will escalate the tussle between the world’s top two economies. Further, back-to-back record highs in the pandemic numbers from the US and Australia renewed fears of another lockdown and weigh on the risks. Additionally, global policymakers also seem in less hurry to announce the much-awaited stimulus packages and keep teasing the bears. It should be noted that investors earlier cheered hopes of nearness to the virus vaccine.
Amid all these catalysts, Wall Street marked another day of mild losses with the US 10-year Treasury yields being sluggish around 0.618%, down 1.2 basis points (bps).
Looking forward, the economic calendar doesn’t offer any major data/events during the Asian session that could move the markets. As a result, traders will have to keep eyes on the pandemic headlines and updates concerning the US-China story for fresh impetus.
Technical analysis
Unless breaking below 0.6900 thresholds, the pair’s gradual run-up to challenge June month’s high around 0.7065 can’t be ruled out.