Following last week’s volatile market nature, Asia-Pacific markets are expected to start trading cautiously. The economic calendar is currently light, allowing prevailing risk trends to remain controlled. The developing Omicron variant of Covid-19 impacted mood last week, causing risk aversion in the broader markets. The VIX indicator, Wall Street’s “fear gauge,” reached its highest level since the epidemic began. Investors are scouring the newswires for signs of the new strain’s threat to the financial markets.
According to preliminary assessments, Omicron is expected to be more infectious and potentially less lethal than Ebola, a combination that might help the epidemic end sooner. Over the weekend, the United Kingdom reported 100 new Omicron illnesses, while Denmark had around 200. A few instances have been documented in the United States. One potentially beneficial side effect of the Omicron variety is the massive spike in vaccinations it appears to have prompted, with the CDC reporting the highest daily totals since May.
Today’s session will be dominated by the Australian Dollar, as the Reserve Bank of Australia’s policy decision is expected to be released on Tuesday. As per market analysts, the RBA is expected to maintain rates constant at its final year meeting. On the other hand, markets expect a rate hike next summer, far sooner than the central bank’s prediction of 2024. Any indication that RBA Governor Lowe is becoming hawkish might increase the AUD/USD. Meanwhile, the currency pair has been falling for five weeks and is now at its annual low. Forex Brokers in Australia are keeping an eye over the market, helping traders to trade actively.
The New Zealand Dollar has also been underperforming against the US Dollar, owing to a drop in commodity prices. Today, the ANZ Bank of New Zealand will announce its monthly commodities prices index for November. ANZ will also publish employment adverts for November in Australia. The Philippines is expected to release its October month’s retail sales figures in other news.
Forecast for AUD/USD Currency
The AUD/USD currency pair is trading marginally higher after hitting a new low in 2021 last week. Just below the newly created annual bottom, significant resistance from the November 2020 low exists. From March 2020, the Relative Strength Index is growing higher from its most oversold value. MACD looks to be moderating as well. If prices continue to rise, the August low of 0.7106 may be a barrier.