AUD/USD consolidates on overnight gains amid 3% drop in iron ore futures
|- AUD/USD is struggling to break above 0.7180, possibly due to losses in iron ore futures.
- The recovery rally could gather pace if the Fed minutes, due at 19:00 GMT, sound dovish.
AUD/USD jumped above the 50-day moving average (MA) hurdle yesterday. So far, however, the follow-through has been weak, possibly due to a drop in iron ore prices
Dalian iron ore futures ended a three-day winning streak today, falling nearly 3 percent to CNY 616 per tonne, according to Reuters. Iron ore is one of Australia's top exports. Further, a below-forecast Aussie fourth-quarter wage price index released earlier today could be capping gains in AUD/USD.
However, the stalled recovery rally from recent lows near 0.7050 could gather pace if the Fed minutes reiterate willingness to use balance sheet as a tool if required. Last month, Fed's Powell had said that
The central bank, at its Jan. 30 meeting, held rates steady and counseled patience on further rate hikes. Powell also said in his press conference then that the Fed would be flexible about further reducing its $4 trillion balance sheet if warranted.
Technical Levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.