AUD/USD pulls away from session highs, stays afloat above 0.7250
- AUD/USD posts modest daily gains following Monday's decline.
- Wall Street's main indexes remain on track to open decisively higher.
- US Dollar Index edges lower toward 93.00 on Tuesday.
Pressured by the intense flight to safety, the AUD/USD pair dropped to its lowest level since late August at 0.7219. With the market mood improving on Tuesday, the pair managed to stage a rebound and touched a daily high of 0.7283. As of writing, the pair was up 0.17% on the day at 0.7262.
Eyes on Wall Street
Reflecting the positive risk sentiment, US stock index futures are up between 0.7% and 0.85. In case Wall Street's main indexes post decisive gains after the opening bell, the greenback is likely to have a difficult time finding demand. At the moment, the US Dollar Index (DXY) is down 0.1% at 93.13.
August Housing Starts and Building Permits data will be featured in the US economic docket later in the session.
On the other hand, the Reserve Bank of Australia's (RBA) Meeting Minutes failed to trigger a significant market reaction during the Asian trading hours on Tuesday. The publication showed that policymakers remain committed to maintaining highly supportive monetary conditions and that they will review the bond purchase program in light of changing economic conditions.
On Wednesday, Westpac Leading Index from Australia will be looked upon for fresh impetus. More importantly, the People's Bank of China (PBoC) will announce its monetary policy decisions. In case the PBoC addresses concerns regarding the Evergrande crisis and takes policy action, the AUD could continue to gather strength against its American counterpart.
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.
