- AUD/USD remains on track to close with strong gains.
- US Dollar Index edges lower on Wall Street rally.
- RBA's Debelle says he is not convinced negative rates would work.
The AUD/USD pair climbed to its highest level since early September at 0.7368 but lost its traction ahead of the American session. After edging lower toward 0.7300, the pair regained its traction in the late American session and was last seen gaining 0.93% on the day at 0.7352.
During the Asian trading hours, Reserve Bank of Australia's (RBA) Deputy Governor Guy Debelle said that he was not convinced that negative rates would work in Australia. Meanwhile, the data published by the Australian Bureau of Statistics revealed that Exports and Imports in October rose by 6% and 8%, respectively.
DXY fails to hold in the positive territory
In addition to the RBA commentary, the upbeat market mood provided a boost to the risk-sensitive AUD on Tuesday. Although the greenback took advantage of the rising US Treasury bond yields in the early American trading hours and recovered its losses, the US stock market rally caused the US Dollar Index to turn south.
As of writing, the Dow Jones Industrial Average and the S&P 500 were both up around 1.7% on a daily basis and the DXY was down 0.26% at 92.26.
Meanwhile, the data from the US showed that the Conference Board's Consumer Confidence Index fell to 96.1 in November from 101.4 in October but had little to no impact on market sentimet.
There won't be any significant macroeconomic data releases from Australia on Wednesday and the market's risk perception is likely to remain the primary driver of AUD/USD's movements.
Technical levels to watch for
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Darkest fefore dawn
The upcoming economic news is likely to be dreadful, and if it is not dreadful, it will be mostly ignored. This includes the release of the preliminary January PMI figures at the end of the week. Japan is extending its national emergency to another five prefectures, which collectively account for over half of the nation's GDP.
DXY breaks above key downtrend, eyes move above 91.00
USD has been strongly supported on what has shaped up to be a very much risk off final trading day of the week. Most G10/USD pairs have seen significant weakness, aside from CHF/USD and JPY/USD, given that the two currencies are also considered “safe havens”.