- AUD/USD came under intense selling pressure on Thursday and dived closer to the weekly low.
- The risk-off impulse benefitted the safe-haven USD and weighed on the perceived riskier aussie.
- The market focus will remain glued to fresh developments surrounding the Russia-Ukraine saga.
The AUD/USD pair maintained its heavily offered tone through the early European session and was last seen trading around the 0.7175 region, down nearly 0.80% for the day.
The pair witnessed aggressive selling on Thursday and extended the overnight pullback from the 0.7285 area, or the highest level since January 14 amid a fresh wave of the global risk-aversion trade. The markets took a turn for the worst after Russian President Vladimir Putin authorized a special military operation to protect Ukraine’s Donbas region. This, in turn, provided a strong boost to the safe-haven US dollar and drove flows away from the perceived riskier aussie.
NATO confirmed an official invasion of Ukraine and reports indicated that Russian forces are attacking the Ukrainian border around Belarus. Moreover, Ukraine border guards said that an attack is also coming from Crimea. US President Joe Biden called the attack unprovoked and unjustified and announced to impose severe sanctions on Russia. This further fueled worries about a further escalation of tensions between Russia and the West, which continued weighing on the sentiment.
The continuous worsening of the situation in Ukraine dragged the AUD/USD pair back closer to the lower end of its weekly trading range. Some follow-through selling will be seen as a fresh trigger for bearish traders and set the stage for a further near-term depreciating move. Thursday’s release of the Prelim US GDP report might do little to provide any meaningful impetus as the market focus remains glued to fresh developments surrounding the Russia-Ukraine saga.