FXStreet reports that according to Westpac, many currencies are still ploughing higher and A$’s commodity fundamentals remain in very good shape.

“The A$’s vaccine jolt higher has run into resistance around 0.73 this week. Global equities are pausing for breath too, caught in a tug of war between medium-term vaccine optimism and tightening restrictions to curb covid spikes. But many currencies are still forging higher and A$ has slipped to the bottom half of the G10 tables, ceding its usual outperformance position when the US$ broadly declines.”

“The RBA’s stepped-up pace of asset purchases may be one background factor capping the A$. Other headwinds include China’s intensifying threats to Australian exports, even as both nations sign the RCEP ‘free trade agreement’.”

“The US$ is likely to breakdown to fresh lows at some point. US rebound momentum was already faltering and will surely slow further following the latest patchwork of local efforts to contain the virus’ spread. That, and reduced hopes for a large-scale fiscal stimulus that would have come with a blue wave US election outcome should see the Fed deliver a strong dovish message at their mid-December meeting.”