AUD/USD struggles at the 50-DMA though it remains nearby around 0.7250

• On Wednesday, the Australian dollar advances some 0.28% as Wall Street’s session ends.
• Covid-19 Australian developments spurred an emergency meeting of PM Morrison.
• In the US economic docket, Pending Home Sales for November shrank 2.2%, blamed on supply shortages and bottlenecks.

The AUD/USD edges higher as the Wall Street session ends, trading at 0.7250 at the time of writing. US equities ended the session in the green, reflecting investors’ upbeat mood, shrugging off Covid-19 Omicron woes, which according to studies, causes mild symptoms that would not require hospitalization in the case of two doses of vaccinated people.

In the FX market, risk-sensitive currencies like the AUD and the NZD overperform safe-haven peers like the USD, the JPY, and the CHF. Hence, the Aussie dollar rose some 0.32% courtesy of diminished demand for US dollars, as portrayed by the DXY, falling some 0.33%, sitting at 95.90.

In the meantime, the US bond market begins to reflect the hawkish pivot of the Federal Reserve, as witnessed by US Treasury yields in the long term of the curve, rising sharply between six and a half and seven and a half basis points, led by 10s, the 20s, and 30s, sitting at 1.555%, 2.00%, and 1.967%, respectively.

In the Asian session, Covid-19 Omicron cases increased sharply in Australia, spurring a national emergency meeting of PM Scott Morrison ahead of schedule on Thursday, putting a lid on the AUD/USD pair. Nevertheless, good news on Australia – China trading front increased the prospects of the AUD, as China’s Commerce Ministry announced the raise of the importing quota on Australian wool in 2022 to 40,203 tonnes,

In the meantime, the US economic docket featured the Goods Trade Balance for November, which showed a wider deficit than expected, coming at 97.78B more than the 89.00 Billion estimated. Furthermore, Pending Home Sales for the same period, on a monthly basis, shrank 2.2%, worse than the 0.5% increase expected, showing the first signs of inflationary pressures mounting on consumers.