- AUD/USD pared early gains, hitting a daily low in the final hour.
- The risk sensitive Aussie Dollar was dragged down by risk aversion.
The AUD/USD pulled back 35-40 pips in the European session, trading back below 0.7300 in the last hour.
The pair started the week in positive territory, although the move higher lacked conviction trading within the one week old range. Risk aversion then took over, limiting gains in the perceived riskier Aussie Dollar.
Rising global covid cases poured cold water on hopes of V shaped recovery. This combined with rising tensions between US and China hit risk appetite, boosting the US Dollar owing to its safe haven status and contributing to AUD/USD pair’s pullback from the daily high of 0.7324, struck in the Asian session.
Given the light economic calendar risk sentiment is expected to drive AUD/USD. A speech by Fed Chair Jerome Powell might influence the USD producing short-term trading opportunities.