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AUD Bottom Of Pile On Covid Worries

FOREX

AUD is bottom of the G10 pile so far, AUD/USD down 12 pips and making fresh 2021 lows. The local COVID-19 situation is keeping pressure on AUD, the NSW Premier refused to rule out further restrictions over the weekend as case numbers on Saturday rose to 105 while local media report epidemiologists saying the chance of lockdown ending on Wednesday is 'optimistic. Elsewhere a WSJ piece has argued that the latest lockdown in Australia could prove a setback for the RBA's tapering plans.

  • NZD is also under pressure, NZD/USD down around 5 pips. Data earlier showed New Zealand June performance of services index rose to 58.6 from 56.3 previously.
  • JPY is stronger, USD/JPY is down 18 pips and below the 110 handle; Tokyo declared its largest increase in new COVID-19 cases since January over the weekend, while Kanagawa declared a state of emergency last Friday (to take effect this coming Thursday), Saitama and Chiba have expanded areas covered by virus countermeasures
  • Offshore yuan is slightly weaker, USD/CNH up 20 pips but still within Friday's range. Markets look ahead to LPR announcements tomorrow.

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