AUD Firms Up Despite Headwinds

AUD/USD posted modest gains Wednesday, as participants weighed the recent vaccine optimism against worrying reports about the global coronavirus situation, including a "circuit-breaker" lockdown in South Australia. Firmer commodities (oil and iron ore in particular) lent support to the Aussie, helping it weather the impact of a poor showing at Wall St.

• Australia, the UK & U.S. issued a joint statement criticising China's policies in Hong Kong. As a reminder, earlier this week China's Foreign Min blamed Australia for damaging bilateral relations by adhering to "Cold War mentality". Elsewhere, the Sydney Morning Herald pointed to a deliberate leak of a document outlining 14 Sino-Australian disputes from the Chinese embassy in Canberra.
• The Australian reported that PM Morrison has delayed the decision on freezing a rise in mandatory pension contributions until the May budget.
• The rate last sits at $0.7303, little changed on the day. A break above Nov 9/17 highs of $0.7340 would allow bulls to target Sep 16 high located just a few pips higher, at $0.7345. Bears need a fall through the 20-EMA at $0.7231 would open up Nov 13 low of $0.7222.
• Australian labour market report steals the limelight today. On Friday, the ABS will publish preliminary retail sales.