AUD/USD falls sharply to 0.7760 area on renewed USD strength
- AUD/USD reversed its direction in the early American session.
- US Dollar Index erases early losses, rebounds to 90.50.
- NY Fed Empire State Manufacturing Index rose more than expected in February.
After climbing to 0.7800 area during the European trading hours, the AUD/USD pair reversed its direction in the early American session and dropped to 0.7760, where it was down 0.22% on a daily basis.
DXY stages decisive rebound
The renewed USD strength in the second half of the day seems to be weighing on AUD/USD. The US Dollar Index, which dropped to a fresh multi-week low of 90.11 on Tuesday, is currently up 0.05% on the day at 90.52.
In the absence of significant fundamental drivers, the 3% increase witnessed in the 10-year US Treasury bond yield is helping the USD outperform its rivals. Meanwhile, the data published by the Federal Reserve Bank of New York showed that the Empire State Manufacturing Index in February improved sharply to 12.1 from 3.5 in January and beat the market expectation of 6.
Meanwhile, the S&P 500 Futures are still up 0.25% on the day and a positive start to the day in Wall Street could help AUD/USD limit its losses.
There won't be any other macroeconomic data releases featured in the US economic docket in the remainder of the day. On Wednesday, Westpac Leading Index 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.
