Aussie falters at key 70c handle as risk sentiment consolidates

Daily Currency Update

AUD - Australian DollarTuesday’s offshore sessions saw a consolidation in global risk appetite as equity markets were lower and the safe haven USD was higher. This saw the Australian Dollar trade sideways, ranging between 0.6925 and 0.6878 throughout overnight trade. Given the escalating situation in Victoria, the AUD/NZD cross was forced lower, slipping from 1.0630 to 1.0609, opening up the door for a move below 1.06. The news of 191 new COVID-19 cases in Victoria yesterday led to the announcement of a 6-week lockdown in metro Melbourne and a closure of the Victoria-NSW Border by the Victorian government. The local currency, which was approaching the key 0.7000 handle at Asian open, was sold off nearly 60 points on the news to trade closer to 0.6930. As expected, the RBA maintained their monetary policy stance yesterday, holding the cash rate at 0.25% and delivered nothing of impact to markets. As we head into a very quiet day on the data release front, we’re expecting the local unit to continue to trade in line with global risk sentiment. Due to the unfolding situation in Victoria, risks are seemingly skewed to the downside with immediate support at 0.6930 looking vulnerable. On the topside, key resistance at 0.7000 is still a big obstacle.