AUD/USD pulls away from daily highs, steadies around 0.7350 ahead of Powell's testimony
|- AUD/USD trades in a tight range after Monday's decline.
- RBA left its monetary policy unchanged as expected.
- Risk-positive market environment continues to weigh on USD.
The AUD/USD pair lost 50 pips on Monday and struggled to stage a meaningful rebound on Tuesday. As of writing, the pair was up 0.08% on the day at 0.7350.
RBA fails to trigger a market reaction
At its December monetary policy meeting, the Reserve Bank of Australia (RBA) decided to keep its policy rate unchanged at 0.1% as expected. In its policy statement, the RBA noted that it does not expect to hike the policy rate at least for three years and added that it will keep the size of bond purchases under review. Nevertheless, the AUD showed no immediate reaction to the RBA's announcements.
Meanwhile, the data from Australia revealed that the business activity in the manufacturing sector continued to expand at a robust pace in November with the Commonwealth Bank Manufacturing PMI arriving at 55.8%.
On the other hand, the risk-positive market environment is forcing the safe-haven greenback to remain on the back foot and allows AUD/USD to sit comfortably above 0.7300. At the moment, the US Dollar Index is down 0.08% on the day at 91.80 and the S&P 500 looks to start the day decisively higher.
In the second half of the day, FOMC Chairman Jerome Powell will be testifying before Congress. Additionally, the IHS Markit and the ISM will be releasing the Manufacturing PMI data for November.
Technical levels to watch for
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