- AUD / USD is sent on the handle of 0.65 as risk kicks in the European and American markets.
- Signs of a vaccine in development are stimulating markets.
- Tradewars are bubbling over the rear burners, likely to weigh on the AUD in the future.
At the time of writing, the AUD / USD was trading at 0.6517, dropping from a low of 0.6410 to a high of 0.6518. The AUD ended the week on a soft note as growth concerns weighed. However, we are seeing increased risk, a recovery in the stock markets and an increase in the AUD. There are promising developments in various areas of current themes, for the moment, but we must continue to expect unstable exchanges for the AUD, albeit with a high tail risk mood due to rising tensions geopolitics.
The US dollar was on the back early this week and has given way to G10 rallies elsewhere, fueling an offer in an otherwise oppressed AUD. Recently, the perceived demand for safe haven by the US dollar has been blocked as the markets are causing a wave of optimism surrounding not only the reopening of economies around the world, but also a promising development in the race to a vaccine for COVID-19.
Signs of a vaccine breakthrough
Meanwhile, one of the leading biotechnology companies in the race to develop a coronavirus vaccine has announced that the first results of the first human tests are possible.
The first vaccine against the coronavirus tested on people seems safe and able to stimulate an immune response against the virus, announced on Monday its manufacturer, Moderna,
– The New York Times reported in a recent exchange.
A phase 2 study was granted to recruit 600 additional volunteers – half over the age of 55 – to provide additional immunogenicity data. There is hop in July that the company will begin a phase 3 study to show that the vaccine can actually prevent the disease.
Trade wars to weigh
Meanwhile, as TD Securities analysts point out, AUD / USD: It is difficult for Australia – TDS, not only are there technical downside arguments, but the fundamentals do not add up in the long run. While signs of a vaccine and glimmers of hope in an economic recovery may support sentiment in the short term, the President remains intent on eliminating the world’s largest trading partnership. China and the yuan will be key drivers for the Australian. Whereas a weak yuan will be good for the Chinese economy in the short term. However, tensions between the United States and China that have resumed since US President Donald Trump blamed China for its management of the coronavirus pandemic and US lawmakers are developing proposals to push American companies to move their operations or their main suppliers outside of China. If the United States does apply new administrative restrictions, the yuan will likely test the lows reached last September, which will dampen the AUD.