- Fed's Bullard sees current policy rate appropriate the in near-term.
- DXY drops below the 94 mark for the first time in three weeks.
- The PPI in U.S. rises by 0.4% in October.
The AUD/USD pair build on its earlier gains at the NA session opening and rose to a fresh daily high at 0.7650 before starting to consolidate its gains. At the moment, the pair is trading at 0.7640, up 0.22% on the day.
DXY dominates the price action on Tuesday
After spending the first day of the week in a tight range amid a lack of fresh fundamental catalysts, the US Dollar Index came under pressure on Tuesday as the uncertainty surrounding the US Senate's tax bill kept the investors away from the greenback. Moreover, in a speech on Tuesday, St. Louis Fed President James Bullard, a dovish FOMC member, said that the low unemployment was not a harbinger of higher inflation and added that he saw it appropriate for the Fed to keep the policy rate at its current level in the short-term.
On the other hand, today's data from the U.S. showed that the producer price index for final demand rose by 0.4% on a monthly basis in October, lifting the annual rate to 2.8% from 2.6%, surpassing the market expectation of 2.4%. Although this data is likely to ramp up the consumer inflation expectations, the US Dollar Index struggled to gain traction. At the moment, the index is at 93.95, losing 0.48% on the day.
The next potential catalyst for the pair will come during the early Asian session when the Faculty of Economics and Commerce Melbourne Institute announces the Westpac Consumer Confidence in Australia.
Technical outlook
0.7700 (psychological level/200-DMA) is a critical hurdle for the pair ahead of 0.7780 (Oct. 25 high) and 0.7830 (Oct. 23 high). On the flip side, supports could be seen at 0.7625 (Oct. 27/Nov. 7 low), 0.7570 (Jul. 7 low) and 0.7500 (psychological level).
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