Aussie Fails to Keep Gains Despite Supportive Fundamentals

The Australian dollar had started Tuesday’s trading with gains but has reversed its movement later. The Aussie managed to keep gains only against its US and Canadian counterparts at the time of writing. That is despite positive macroeconomic data and the risk-on market sentiment.
The Monthly Business Survey performed by the National Australia Bank showed that the business confidence improved from 5 in December to 10 in January. Alan Oster, NAB Group Chief Economist, commented on the optimism of businesses:

Business started the year on a more optimistic note, even as conditions eased from the strength we saw in December. Importantly, employment conditions remain in positive territory – so overall businesses are still expanding their workforce.

At the same time, business conditions pulled back from 14 to 7. Alan Oster had the following to say about the decline:

The decline in conditions was broad-based across industries, except for a small improvement in recreation & personal services, which continues to make small gains as restrictions ease. Overall, in trend terms conditions remain strongest in retail and weakest in construction followed by personal services.

As for the general market sentiment, the main source of optimism was positive news about coronavirus vaccines. While the effectiveness of the AstraZeneca vaccine against the South African variant of the COVID-19 remains questionable, it looks like the Pfizer vaccine is effective against the new strain. Therefore, investors continue to hope that vaccines will help the global economy to recover from the coronavirus pandemic.
AUD/USD rose from 0.7699 to 0.7718 as of 7:43 GMT today. EUR/AUD was down from 1.5639 to 1.5623 intraday but rebounded to 1.5651 later. AUD/JPY fell from 81.03 to 80.89 after rising to the daily high of 81.16 earlier. AUD/CAD gained from 0.9803 to 0.9825.
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Original from: www.earnforex.com