AUD/USD drops to fresh two-week lows near 0.7660 amid broad USD strength
- AUD/USD is falling sharply ahead of key US events.
- US Dollar Index pushes higher above 92.00 despite falling US T-bond yields.
- Risk-averse market environment is providing a boost to the USD.
The AUD/USD pair closed the first day of the week in the positive territory but came under strong bearish pressure on Tuesday. As of writing, the pair was trading at its lowest level in two weeks at 0.7667, losing 1% on a daily basis.
DXY leaps above 92.00 on safe-haven flows
The broad-based USD strength seems to be weighing on AUD/USD. The US Dollar Index (DXY) is currently rising 0.45% at 92.14 despite a 3.75% decline witnessed in the benchmark 10-year US Treasury bond yields. The risk-averse market environment, as reflected by slumping global equity indexes, is helping the greenback outperform its rivals as a safe-haven.
Later in the session, Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen will be testifying before Congress on the government's response to the pandemic. Additionally, St. Louis Fed President James Bullard Federal Reserve Bank of Atlanta President Raphael Bostic will be delivering speeches on the state of the economy.
Meanwhile, investors will keep a close eye on the performance of Wall Street's main indexes. Currently, the S&P 500 Futures are down 0.4% on the day and a sharp retreat in the US stocks could allow the greenback to preserve its strength in the second half of the day.
On Wednesday, the Commonwealth Bank's Manufacturing and Services PMI reports from Australia will be looked upon for fresh impetus.
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.
