AUD/USD consolidates Tuesday's losses around mid-0.7200s ahead of FOMC Minutes
- AUD/USD stays relatively calm following Tuesday's sharp fall.
- US Dollar Index stays above 93.00 on Wednesday.
- Investors remain focused on risk sentiment, await FOMC Minutes.
Following Tuesday's sharp decline, the AUD/USD pair touched its lowest level since November at 0.7239 on Wednesday before going into a consolidation phase. As of writing, the pair was virtually unchanged on a daily basis at 0.7252.
AUD struggles to gather recovery momentum
Earlier in the day, the data from Australia revealed that the Westpac Leading Index declined to -0.11% in July from -0.07%. Furthermore, the Wage Price Index increased by 0.4% on a quarterly basis in the second quarter and missed the market expectation of 0.6%. The disappointing data releases and the Reserve Bank of Australia's cautious tone regarding the economic outlook seem to be making it difficult for the AUD to stage a decisive rebound.
On the other hand, the US Dollar Index is moving up and down in a tight range above 93.00 after posting strong gains on Tuesday. Currently, the S&P Futures and the Nasdaq Futures both trade flat on the day, suggesting that the risk sentiment will unlikely be able to provide a directional clue to AUD/USD after the opening bell.
The only data from the US showed that Housing Starts declined by 7% on a monthly basis in July while Building Permits increased by 2.6%. Later in the session, the FOMC will release the minutes of its July policy meeting.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
