Welcome to our daily market update where we help keep you informed on the latest happenings in the world of FX, and show you what this means for the Mighty Aussie Dollar.
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Key Data Being Released Today Monday the 29th of November 2021
- JPY – BOJ Gov Kuroda Speaks
The Aussie Dollar – Fundamentals
The latest data out of South Africa regarding the recently discovered new Covid-19 Omicron variant has caused global health authorities and the scientific community to be highly concerned. There is a chance that 1) the Omicron variant might be more transmissible than the delta variant and 2) the Omicron variant might be vaccine resistant. According to the scientists who have sequenced the Omicron variant’s genome, it has a high number of mutations to the spike protein (the part the mRNA vaccines are designed to target). According to some in the scientific community, it is the “most evolved” variant yet discovered from the original virus.
A major theme in the news on Friday has been various countries around the world reimposing travel restrictions to South Africa and other nations known to house the new variant. Market participants have been dumping risk assets out of fear that not only travel restrictions will hurt the global economic recovery, but also that the countries may be forced into further lockdowns again if the new variant is as dangerous as feared.
Historically the Aussie has not been a good asset to hold in these conditions, given its historic strong correlation to risk appetite and the Australian economy’s exposure to global economic conditions. Moreover, industrial metals took a beating on Friday amid fears of a global economic slowdown, with the Bloomberg Industrial Metals subindex (BCOMIN) lurching 3.8% lower. The export of industrial metals and their ingredients such as copper and iron ore are key for the Australian economy.
The Aussie Dollar – Technical Analysis
Aussie Dollar has fallen sharply on the risk-off moves sparked by the new covid variant. Analysts at Credit Suisse believe that a weekly close below the 2021 low at 0.7110 would confirm a major top to suggest further sustained weakness.
Resistance on the Top Side – If the market rebounds higher resistance will start at 0.7172, then 0.7300 which will be closely followed by the 50-Day MA at 0.7337.
Support on the Downside – If the market continues to fall after breaking the 0.7170 level, we see immediate support at 0.7110, then 0.7000 and beyond that 0.6800.
AUD/USD Daily Chart
DXY (USD INDEX) Daily Chart
Major Global Markets
- Stocks
- S&P 500 closed at 4594
- NASDAQ closed at 15257
- ASX 200 closed at 7279
- Currencies
- AUD/USD – At the time of writing this report trades at 0.7122
- AUD/JPY – At the time of writing this report trades at 80.83
- AUD/CNH – At the time of writing this report trades at 4.5528
- DXY (US Dollar Index) – At the time of writing this report trades 96.07
- AUD/EUR – At the time of writing this report trades 0.6299
- Bonds
- US 10-year Bonds are currently at 1.169
- Aussie 10-year Bonds are currently at 1.482
- Commodities
- Iron Ore 62% – Trading at USD/T 94.44
- Gold – trading at USD/OZ 1789
- Brent Crude Oil – Trading at USD/Bbl 74.55