Initial Gains Dissipate

The minutes from the FOMC's most recent monetary policy meeting signalled potential for earlier and faster rate hikes, with some policymakers supportive of reducing "the size of the Federal Reserve's balance sheet relatively soon after beginning to raise the federal funds rate." The minutes pulled the rug from under AUD/USD, as the greenback caught a fresh bid, prompting the pair to give up its earlier gains.

• PM Morrison confirmed changes to Australia's Covid-19 testing arrangements on Wednesday, adding that the nation has no choice but to "ride the wave" of infections. Elsewhere, Victoria announced a suspension of elective surgery as hospitalisations due to Covid-19 infections continue to rise.
• AUD/USD operates at $0.7222, little changed on the day. A fall through Jan 3 low of $0.7184 would allow bears to take aim at Dec 22 low of $0.7121. Conversely, a jump above Dec 31 high of $0.7278 would give bulls a green light for targeting the 61.8% retracement of the Oct 28 - Dec 3 downleg at $0.7341.
• The Australian economic calendar includes nothing of real note through the rest of this week.