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  • AUD/USD remains on the back foot while refreshing intraday low after Aussie data.
  • Australia’s Producer Price Index grew more than expected in Q4.
  • S&P 500 Futures print mild losses amid chatters over equity restrictions for retail traders, vaccine news and fears of the currency war.
  • Risk catalysts remain as the key amid a lack of major data/events.

AUD/USD fails to respect upbeat Producer Price Index (PPI) data from Australia while refreshing intraday low to 0.7664 during Friday’s Asian session. The reason could be traced from the market’s risk-off mood amid a light calendar.

Australian PPI grew past-0.1% forecast and 0.4% previous readings to 0.5% QoQ during the fourth quarter (Q4) of 2020. Further details suggest the yearly figures also recovered from -0.7% market expectations to -0.1%.

The pair’s latest losses could have been from the sober mood as equity restrictions for retail traders roil sentiment off-late. After the Gamestop saga, various broking houses have stopped offering some of those equities for trading while the US House Financial Services Committee is up for hearing on short selling, online trading platforms.

Elsewhere, Novavax unveiled 89.3% efficacy of its covid vaccine during the phase 3 trials. The firm also conveyed the jab’s ability to tame virus variant found in the UK but not that from South Africa. Following the announcement, UK PM Boris Johnson teased the rollout of the vaccine and further addition to the British vaccine store. Although the same suggests receding virus woes in Britain, the EU-UK tussle over the pandemic’s cure may escalate due to the issue and weigh on risks.

It should be noted that the risks also fear US Treasury Secretary Janet Yellen’s preference for weaker US dollar to trigger the currency war, as cited by Bloomberg. Additionally, US stimulus gridlock, fears of a double-dip recession and Sino-American tussle are an extra burden to the market sentiment.

Against this backdrop, S&P 500 Futures drop 0.42% while stocks in Australia gain and those from Japan mark mild losses by press time.

Looking forward, a light calendar ahead of the US session, comprising Private Income-Spending details and Chicago PMI data, will keep the AUD/USD pair traders on the lookout for risk catalysts.

Technical analysis

Inability to cross 21-day EMA, currently around 0.7700, directs AUD/USD towards 50-day EMA re-test, at 0.7590 now.