AUD/USD fails to hold above 0.7500, eyes on US CPI data
- AUD/USD fluctuates in a tight range for the second straight day.
- Annual CPI in US is expected to decline to 4.9% in June.
- US Dollar Index edges higher toward 92.50 on Tuesday.
The AUD/USD pair closed the first day of the week virtually unchanged and seems to be having a difficult time making a decisive move in either direction on Tuesday. After rising to a daily high of 0.7503, the pair reversed its direction and was last seen trading flat on the day at 0.7477.
Earlier in the day, the data from Australia showed that the National Australia Bank's Business Confidence Index dropped to 11 in June from 20 in May, compared to the market expectation of 23. Additionally, the Business Conditions Index fell to 24 from 36 and missed analysts' estimate of 33. On a positive note, HIA New Hom Sales increased by 14.8% on a monthly basis in June but this print failed to help the AUD gather strength.
DXY holds in the positive territory
Meanwhile, the US Dollar Index (DXY), which managed to post modest daily gains on Monday, continues to push higher ahead of the June inflation report from the US. Currently, the DXY is up 0.16% at 92.38.
Investors expect the Consumer Price Index (CPI) to edge lower to 4.9% on a yearly basis from 5% in May. A stronger-than-expected reading is likely to allow the greenback to preserve its strength against its rivals. On the other hand, a soft inflation figure is likely to weigh on the USD and provide a boost to AUD/USD:
US Consumer Price Index June Preview: Has inflation peaked?
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.
