- AUD/USD edges lower in the early European session.
- Downbeat economic data pushes aussie lower against the US dollar
- Risk-off mood keeps investors away from riskier assets.
The AUD/USD pair remains on track to lose the upside momentum in the early European session. The pair rallied from the lows of 0.7688 in the past four sessions, however, failed to hold onto the 0.7800 mark and retreated toward the 0.7780 level on Wednesday.
As of writing, the AUD/USD pair is trading at 0.7788, down 0.03%.
The AUD remained on the back foot against the US dollar, following the downbeat Consumer Confidence readings. The Westpac Consumer Sentiment fell 4.7% MoM in May from an earlier 11-year high of 118.8 in April. In addition to that, the Wage Price Index rose to 1.5% YoY in the first quarter (Q1) but failed to boost market sentiment.
Rising commodity prices aid some constructive bids for the aussie. The rising inflationary risk owing to higher prices and supply-chain issues keeps the gains limited for the commodity-linked AUD.
Meanwhile, as per a survey conducted by Roy Morgan Australia, demand for Chinese-made products including clothes, electrical appliances, mobile phones, footwear and sporting goods fell in 2020. The survey readings could be considered as part of the aftermath of the ongoing tussle between Australia andChina.
On the other hand, the US Dollar Index (DXY), which tracks the performance of the greenback against a basket of major currencies, remains depressed below 90.0 after disappointing Housing Start data that plunged 9.5% in April and raised doubts over the pace of economic recovery.
As for now, traders turn their focus to the release of the Federal Reserve minutes for April’s monetary policy meeting to track market sentiment. Fed comments on inflation and a probable rate hike would set the tone for the market ahead.
AUD/USD Additional Level
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