AUD/USD extends rebound to 0.7370 on USD selloff
- AUD/USD continues to push higher ahead of the weekend.
- UoM Consumer Sentiment Index dropped to multi-year low of 70.2 in August.
- US Dollar Index remains on the back foot, drops toward 92.50.
The AUD/USD pair extended its daily recovery during the American trading hours and touched a daily high of 0.7374. As of writing, the pair was up 0.52% on the day at 0.7372.
Falling US T-bond yields, dismal data hurt USD
The broad-based USD weakness seems to be helping AUD/USD push higher ahead of the weekend. The data from the US revealed on Friday that the University of Michigan's Consumer Sentiment Index slumped to its worst level in nearly a decade at 70.2 in August. This reading missed the market expectation of 81.2 by a wide margin and triggered a USD selloff. At the moment, the US Dollar Index is down 0.45% on a daily basis at 92.57.
Assessing the sentiment report, "there is little doubt that the pandemic's resurgence due to the Delta variant has been met with a mixture of reason and emotion," said Richard Curtin, Surveys of Consumers chief economist. "Consumers have correctly reasoned that the economy's performance will be diminished over the next several months."
In addition to the disappointing data, the sharp decline witnessed in the US Treasury bond yields is making it difficult for the USD to find demand. Currently, the benchmark 10-year US Treasury bond yield is losing 3.75% at 1.31%.
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.
