Commodity Currencies AUD, NZD Under Pressure as Australia Sees Surge in COVID-19 Cases

It’s a bearish start to the final day of 2021 for leading commodity currencies AUD and NZD as fresh COVID-19 cases across Australia climb higher and raise concerns about the economic outlook down under. At the time of writing, AUD/USD is trading at around $0.725.

The Australian dollar has slipped from the highest levels seen in six weeks on account of the rising caseload. It had previously strengthened amid a return in risk appetite in global financial markets, which had driven investors away from the US dollar and towards riskier instruments such as equities and riskier currencies.

So far this year, AUD/USD has lost around 5.8% of its value on account of the pandemic related worries. Most of the weakness in the currency pair can be attributed to the rising US dollar, which has posted a strong performance through the year as a safe haven currency amid prevailing uncertainties about the economic toll of the COVID-19 pandemic which still rages on and keeps the world on edge.

Meanwhile, NZD/USD is also showing signs of some weakness, after slipping from a high of $0.6857 touched in overnight trading during the previous session. While it remains well above the 13-month low it traded at a short while ago, the currency pair is experiencing some bearish moves on the last day of the year.

So far this year, NZD/USD has weakened by around 4.9%, mainly on account of the risk-off mood in global markets due to the pandemic. The latest bearish moves came after NeW south Wales saw reported a surge in fresh infections by over 21,000, far above the 200 odd cases being reported during the beginning of the month.