AUD/USD: Aussie just off 6-week lows

The Australian dollar was higher against the US dollar on Wednesday afternoon in a mild pullback from new 2020 lows made in the morning. With no economic updates from either country, the exchange rate has been drifting lower inline with broad dollar-strength. In other news, the S&P 500 is again encroaching on record highs as investors warmly-received the latest earnings update from Netflix.

AUD/USD was higher by 10 pips (+0.14%) to 0.6854 with a daily price range of 0.683 to 0.686 as of 3pm GMT, with the currency pair stuck in a steady week-old downtrend.

The US dollar

With the World Economic Forum in Davos underway, earnings season in full tilt and Donald Trump’s impeachment trial in the US Senate, less emphasis is being placed on the US economy and the trajectory of US interest rates. That has amounted to lower volatility in the US dollar.

Republican senators voting in a manner that supports President Donald Trump in the impeachment trial may have offered a small boost to the greenback on Wednesday. The dollar had made some gains as a haven early in the week when market sentiment had been impaired by worries about the new coronavirus.

The Australian dollar

A rebound in risk sentiment has helped a broad recovery in riskier currencies with havens put to one side as stock markets rebounded from yesterday’s dip. The Aussie dollar had been caught in a selloff across Asia thanks to the outbreak of a new coronavirus in China. The close business and trade links make Australia and by extension its currency sensitive to what happens in China.

The Australian dollar has been quiet against most other currencies with traders waiting for Australian unemployment data released tomorrow. The data could hold more relevance than normal because it will be one of the first big releases since bushfires became a national emergency for Australia in December. It will also offer a clue what the Reserve Bank of Australia decide to do at their upcoming meeting on February 4^th.

Expectations for tomorrow’s Australian employment numbers are for the unemployment rate to hold steady at 5.2% while the economy adds 15,000 jobs.

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