AUDU/USD: Lockdowns close Sidney, open aussie's downside – Mizuho

The AUD/USD pair jostled up and down around 0.77 in the first half of June. After dipping to the 0.7475-0.7500 range on June 18, it then moved around 0.75 in the latter half of the month. The AUD/USD pair’s room on the downside looks set to widen in July, in the view of analysts at Mizuho Bank.

Lockdowns introduced to deal with the spread of covid across several Australian regions

“There are concerns that the pace of the economic recovery might slow on the two-week lockdowns implemented in Sydney (NSW) and other regions. The aussie will also be impacted by the RBA’s policy stance. In the US, meanwhile, the FOMC adopted a hawkish stance at its last meeting. Given the US employment data and the Australian lockdowns, it seems that financial conditions in the two countries are starting to diverge.” 

“It seems Australia’s domestic fundamentals to be released this month will continue to remain firm, but the AUD/USD pair could be weighed down by ongoing lockdowns.”