AUD/USD Slips to 0.7150 with Escalation of the Russia-Ukraine Conflict

The AUD / USD index has shown negative growth by hovering around 0.7180, a 0.72% drop compared to the previous week’s trading. This can result from the market weakness surrounding Russia and Ukraine’s geopolitical instability. Even the Australian strong rally in macroeconomic data could not positively affect the AUD / USD. 

With an 18 percent MoM growth in Australia’s retail sales, the pacific nation has secured a 0.5 percent growth in Securities inflation. The overall gross operating profits for the company are at 24 percent in the last quarter even though the expectations of growth are hovering around 0.3%. 

The market’s risk appetite has taken a major downward hit due to ambiguous news emanating from the Russia-Ukraine front, which has further decreased the risk appetite.

With Moscow facing the brunt of harsh sanctions from the west and President Putin escalating the situation by adopting a high nuclear alert, a decisive shift happened in the AUD/USD price. The European Commissioner also cautiously sounded the alarm regarding the downward spike in the market’s overall level of optimism. 

The risk-off mood has been further dampened with news coming from Belarus that it might leave the treaty of non-nuclear status, thereby setting off alarm bells towards further stock market losses. The US dollar index (DXY) has indicated a similar mood, resulting in a stoppage of a three-week uptrend. The 10-year Treasury bonds of the US have been printing six basis points daily till the war started. Presently the stocks are dipping at a downside of 1.9 percent, according to S&P 500 futures. 

The US trade numbers will be heavily focusing on the outcomes of the Russia-Ukraine talks. The Chicago purchasing managers index, has shown positive signs of growth, thus adding impetus in changing the direction of the AUD / USD prices. Traders are not keeping their hopes high on a rate hike which is due in March, according to US non-farm payrolls. 

Technical Analysis 

The AUD / USD bullish investors are pretty unconvinced due to the downside mark of 0.7160. The DMA-21 guards the AUD / USD buyers against huge volatility when the index hits a threshold of 0.7240 

 Market experts view that US NFP trading stock will be a tell-tale indicator of the qualitative easing in the US Federal Reserve. The US markets’ economic catalyst may depend upon its ability to unblock the logistics supply chains. The disruption of oil supply from Gazprom is also seen as an instrument of instability in the European market. The advent of the nuclear option on both sides of the table is sending AUD / USD stocks into a tizzy, and there is a little propensity towards taking on a healthy risk appetite in the current volatile geopolitical circumstances.