AUD/USD bears need to commit around 0.72 the figure

• AUD/USD holds steady as traders await the Fed.
• Markets were jittery on Tuesday but the Aussie holds near 0.7200.

AUD/USD is trading around flat on the day in early Asia after a quiet afternoon trade in North American markets with the price sticking to a narrow 10 pip range between 0.7188 and 0.7201. The Aussie is now caught between falling commodity prices and rising stocks as traders will turn to the labour market data later in the week and the FOMC meeting on Wednesday

On Tuesday, oil prices continued to fall, triggering a lift in US equities. However, as analysts at ANZ Bank explained, there has been ''little progress has been achieved in the talks between Ukraine and Russia with Putin accusing Ukraine of not being serious about finding a mutually acceptable solution.'

''But,'' the analysts said, ''there are hopes a nuclear deal with Iran may soon be concluded, which may bring some stability to the Middle East and shore up oil supplies. New sanctions on Russia were added by the UK, including banning luxury goods exports.''

Meanwhile, fears that coronavirus disruptions in China could hurt demand for commodities, just as Beijing is seeking to expand production at home, is a factor trader will be weighing up. Commodity prices were hit at the start of this week when Beijing locked down the city of Shenzen and imposed a movement ban on the province of Jilin. The daily number of coronavirus cases jumped sharply on Tuesday, raising the risk of more restrictions.

Reuters states that mainland China reported 3,602 new confirmed coronavirus cases on March 14, the national health authority said on Tuesday, compared with 1,437 a day earlier. This was a huge spike. ''Of the new cases, 3,507 were locally transmitted, the National Health Commission said, compared with 1,337 a day earlier. The number of new asymptomatic cases, which China does not classify as confirmed cases, stood at 1,768 compared with 906 a day earlier. There were no new deaths, leaving the death toll unchanged at 4,636.As of March 14, mainland China had confirmed 120,504 cases.''

Meanwhile, China’s government has ordered a province of 24 million people into lockdown as it tries to contain the new outbreak that has spread to multiple locations. The risk to markets is that the lockdowns could trigger shock waves across global supply chains. 

A slowdown in China due to the virus would be an added complication for the Reserve Bank of Australia (RBA) as it wrestles with when to start raising interest rates. Minutes of its March meeting showed that the central bank was still prepared to be patient on policy. The RBA also noted the conflict in Ukraine and the resulting spike in some resource prices was a shock to the global economy that would lift inflation and drag on growth.

''Markets are wagering the inflationary impulse will be the stronger and force the RBA to hike the 0.1% cash rates as soon as June. Investors have also shifted to price in almost six rate rises this year, with December futures implying 1.39%,'' Reuters reported.