AUD Lower Amid New Covid-19 Outbreak in Beijing
Risk appetite is firmly on the back foot again today, with the main driver again a growth in Covid-19 cases. This time, however, focus is not just on the growth of cases in the US, but also on a new outbreak in Beijing.
Overnight, Beijing announced the closure of a fruit and vegetable market and imposed lockdown restrictions on residential areas nearby after dozens of people associated with the wholesale market were tested positive for coronavirus.
Later in the night, it was reported that Beijing had shut down another market and neighbouring residential areas, with surrounding neighbourhoods being placed under locked down.
China Vice Premier Sun warned risks are high for Beijing coronavirus outbreak to spread.
In total, mainland China reported 49 new coronavirus cases on June 14th, with 36 new cases local to Beijing, bringing the total confirmed cases amid this new outbreak to 79.
Turning to the US; there were reports that several US states including Alaska, Arizona, Arkansas, California, Florida, North Carolina, Oklahoma and South Carolina all experienced a record increase in coronavirus cases during the past 3 days (a continuation of last week’s theme).
AUD and NOK lead the declines in G10 FX markets this morning. The former is also being weighed by a batch of poor Chinese data from last night, while the latter is being weighed by lower crude oil prices, which are being hit by risk off.
AUD in particular is at risk should this latest Chinese outbreak gain greater traction and lead to country wide lockdowns, given that China is Australia’s most important trade partner.
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