AUD/USD rises above 0.7730 amid renewed USD weakness
- AUD/USD starts to edge higher ahead of American session.
- US Dollar Index retreats into negative territory near 90.30.
- Eyes on CB Consumer Confidence Index data from US.
The AUD/USD pair edged lower during the Asian trading hours as the risk-off market environment helped the greenback outperform its rivals. With a positive shift in sentiment ahead of the American session, however, the pair gained traction and was last seen trading at 0.7733, where it was up 0.33% on a daily basis.
USD struggles to find demand
Earlier in the day, the US Dollar Index (DXY) advanced to a six-day high of 90.61 supported by safe-haven flows. Nevertheless, the sharp upsurge witnessed in major European equity indices made it difficult for the USD to preserve its strength and the DXY pares its daily gains. As of writing, the index was down 0.1% at 90.29.
Later in the day, the Conference Board will release its Consumer Confidence Index data for January. Meanwhile, the S&P 500 Futures are up 0.15% on the day, suggesting that risk flows are likely to remain in control of financial markets in the second half of the day.
On Wednesday, the Reserve Bank of Australia (RBA) will publish its inflation report. Investors expect the Trimmed Mean Consumer Price Index to remain steady at 0.4% on a quarterly basis in the fourth quarter. A lower-than-expected reading could be seen as a factor that would allow the RBA to keep its dovish stance and put the AUD under bearish pressure. Additionally, the National Bank of Australia's Business Conditions Index will be featured in the Australian economic docket as well.
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.
