- AUD/USD failed to maintain intraday gains and slipped from around0.7745-50.
- A turnaround in equity markets boosted the safe-haven USD, dragging on the Aussie.
- The prospect of additional US fiscal stimulus could cap USD gains, limiting losses in the pair.
The AUD/USD pair retreated around 25 pips from daily tops and has now dropped to the lower end of its intraday trading range, near the 0.7720-25 region.
AUD/USD gained ground but lacked conviction, faltering jaround0.7750s. Weaker than forecast German IFO survey results added to growing market fears over the economic fallout from rising coronavirus cases.
A delay in COVID-19 vaccine supplies and fears surrounding the new variants, have dented investors’ confidence. The mood soured and equity markets turned lower, boosting the US Dollar pressurising on the perceived riskier Aussie.
Expectations of $1.9 trillion in fiscal stimulus to support the US economy, helped offset negative factors and could limit gains in the US Dollar capping the downside in the AUD/USD pair.
Attention will now shift to this week’s FOMC monetary policy decision on Wednesday and the Advance US Q4 GDP on Thursday. Developments surrounding coronavirus and broader market risk sentiment could also drive market movement and provide trading opportunities.