- AUD/USD gains some traction on upbeat domestic data, Chinese inflation figures.
- The uptick lacked any strong follow-through amid persistent trade uncertainties.
- The focus remains glued to the highly anticipated FOMC monetary policy meeting.
The AUD/USD pair seemed struggling to capitalize on its attempted intraday bounce, albeit has still managed to hold with modest gains around the 0.6825 region.
After the early Asian session dip to near one-week lows, the pair managed to regain some positive traction on Tuesday in reaction to upbeat comments by the Reserve Bank of Australia (RBA) Governor Philip Lowe. While speaking at a summit in Sydney, Lowe showed confidence in the central bank’s forecast and anticipated recovery in customer spending.
The uptick got a minor lift following the release of mostly upbeat Aussie data – Housing Price Index for the third quarter and National Australia Bank's (NAB) Business Confidence. This was followed by hotter-than-expected Chinese inflation figures – CPI and PPI print for November – and further underpinned demand for the China-proxy Australian dollar.
Adding to this, a surge in Iron ore futures in China, which rose to their highest level in more than four months on Tuesday, further collaborated towards lending some support to the commodity-linked currency – aussie. However, persistent trade uncertainties, ahead of a looming December 15 tariff deadline, kept a lid on any runaway rally.
Investors also seemed to refrain from placing any aggressive bets, rather preferred to stay on the sidelines ahead of the highly-anticipated FOMC policy meeting. The Fed is scheduled to announce its decision on Wednesday and is expected to maintain status-quo, shifting the focus to updated economic projections and any clues over any further easing in 2020.
Technical levels to watch
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