AUD/USD was lower by 36 pips (-0.51%) to 0.6567 with a daily price range of 0.656 to 0.661 as of 3.30pm GMT. The currency pair hit fresh 11-year lows before edging off lows of the day in the early afternoon. Weekly losses stand at -0.94%.
Risk sentiment surrounding the coronavirus continues to be what guides the Australian dollar-US dollar exchange rate – with the Australian dollar most exposed to slowing global growth by its commodity exports and the US dollar a relative haven as the world reserve currency.
The Australian currency plunged to new decade lows with a move below 0.655 to the dollar but recouped some of the losses when Wall Street opened in the black. In volatile morning trading the Dow Jones Industrial average was up 350 points at the time of writing – but that only scratches the surface of 1900 points loss in the last two days, the biggest two-day points loss on the Dow Jones Industrial Average ever.
USD boosted by Treasury yields
Stocks rebounded alongside Treasury yields, with the US 10-year yield jumping from the record lows reached on Tuesday. The bounce is on shaky ground with little in the way of fundamental backing, meaning if a bottom is in stock markets, it is unlikely to be a straight line higher from here. A smaller than expected build in US oil inventories did offer some hope the demand hit from the coronavirus is not (yet) as bad as some investors are fearing.
US President Trump will hold a press conference to talk about the coronavirus at 11pm GMT. It seems more likely to be a pep talk than a warning. Trump earlier tweeted blaming the media for hyping up the coronavirus saying, “USA in great shape!” The Centre for Disease Control (CDC) officials will attend the presser. The CDC has been less optimistic, warning Americans should take precautions.