AUD/USD Trims Intraday Losses, Stays Under 0.7200 Amidst Russia-Ukraine Crisis
Snap Back After Short-term Low
There was a quick recovery of a few points for the AUD/USD trading pair from the Asian session lows, and it was seen trading with a marginal intraday loss about the 0.7180-0.7185 zones.
AUD/USD price chart. Source TradingView
After an early uptick of a week’s low, the AUD/USD trading exchange saw a U-turn from the 0.7215 zones and slid to a daily low point in the vicinity of 0.7100 as a fresh surge of risk-aversion trade came up. News of Ukrainian forces shooting mortars and multiple grenades into Luhansk People’s Republic, in violation of the ceasefire agreement, had its immediate effect on global risk sentiments to the advantage of the safe-haven American dollar, and on the other hand, diverted funds away from the Australian dollar which is perceived as riskier.
Ukraine Goes on the Offensive
Luhansk People’s Republic (LPR) is situated in the Donbas geopolitical zone, a place internationally acknowledged as a territory of Ukraine, but it is governed by Russian-supported secessionists. The Ukrainian shelling of the region occurred amidst mistrust of Russia’s announcements that it has withdrawn some of its forces from the Ukrainian border and sent them back to their bases. As a matter of fact, NATO and the United States had said in separate statements that they could not see any signs of troop withdrawal and de-escalation from Russia.
The negative effect, nevertheless, was a bit cushioned for the time being as bets of an increase in interest rates by the Reserve Bank of Australia continue. Leading economists from two major money lenders in Australia have called for the first interest rate to be initiated in September 2022. Aside from that, a positive report from the internal jobs data shows that the number of people with jobs increased by 12900 in January. The report acted as a boost and helped reduce the rate of loss for the AUD/USD pair.
Market players are now expectant of the US economic case list, which is expected to feature the publication of the Philly Federal Reserve Manufacturing Index, the week’s jobless claims, and housing market report. The most focus will, nevertheless, be on geopolitical events, which will continually play a significant role in directing the wider market risk mood. This, as well as the US dollar price modulations, are expected to create some other trading opportunities where the AUD/USD pair is concerned.