Falters Amid Familiar Risks, Sino-Australian Tensions Linger

AUD/USD was under pressure Thursday as a sense of concern over a mix of familiar risks resurfaced. The global coronavirus situation remained a source of worry, with multiple central bankers downplaying excessive optimism about a potential Covid-19 vaccine, BBG ran a source report suggesting that the White House has stepped back from fiscal negotiations with Democratic lawmakers, while U.S. Pres Trump banned U.S. investment in Chinese firms with links to the PLA. Resultant risk aversion prompted the rate to shed almost 50 pips on the day.

• A quick recap from yesterday: China's Foreign Ministry spokesman Wang said that Australia's "words and deeds [...] including those related to Hong Kong, Xinjiang and Taiwan" have damaged bilateral relations and the onus is on Canberra to fix them. The bilateral spat has spilled over from political into trade matters, which Australian ministers have called "economic coercion".
• AUD/USD sits at $0.7238, 6 pips better off. A push through Nov 9/Sep 16 highs of $0.7340/45 is needed to bring the upper 3.0% 10-DMA envelope at $0.7443. Bears look for a dip through Nov 6 low of $0.7239, towards Nov 5 low of $0.7145.
• Nothing much left on the Australian docket this week. Looking ahead, next week's highlights include RBA Gov Lowe's speech (Monday), RBA Nov MonPol meeting minutes & weekly payroll data (Tuesday), wage price index & another speech from RBA's Lowe (Wednesday) and labour mkt report (Thursday).