- AUD/USD gains traction in the early American session.
- FOMC Chairman Jerome Powell adopts a dovish tone in his prepared remarks.
- US Dollar Index stays deep in the negative territory below 92.50.
After dropping to a daily low of 0.7433 during the European trading hours, the AUD/USD pair reversed its direction in the early American session and climbed to a session high of 0.7486. As of writing, the pair was up 0.47% on a daily basis at 0.7480.
DXY drops below 92.50 on Powell's prepared remarks
The renewed USD weakness seems to be fueling AUD/USD's upside. Ahead of his testimony before Congress, the Federal Reserve published FOMC Chairman Jerome Powell's prepared remarks and the dovish tone triggered a USD selloff.
Powell is set to reiterate that the monetary policy will continue to deliver powerful support until the economic recovery is complete. Moreover, Powell will note that the job market is still a ways off from the progress needed to start reducing asset purchases.
Reflecting the negative impact of these remarks on the greenback, the US Dollar Index is down 0.4% on a daily basis at 92.40.
Meanwhile, the data published by the US Bureau of Labor Statistics revealed that the Producer Price Index (PPI) jumped to 7.3% on a yearly basis from 6.6% in May. This print surpassed the market expectation of 6.8% by a wide margin but failed to help the USD preserve its strength.
Investors are now waiting for Powell to respond to questions after presenting the Fed's semiannual report at 1600 GMT.
Technical levels to watch for
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD rises to two-day high ahead of Aussie CPI
The Aussie Dollar recorded back-to-back positive days against the US Dollar and climbed more than 0.59% on Tuesday, as the US April S&P PMIs were weaker than expected. That spurred speculations that the Federal Reserve could put rate cuts back on the table. The AUD/USD trades at 0.6488 as Wednesday’s Asian session begins.
EUR/USD now refocuses on the 200-day SMA
EUR/USD extended its positive momentum and rose above the 1.0700 yardstick, driven by the intense PMI-led retracement in the US Dollar as well as a prevailing risk-friendly environment in the FX universe.
Gold struggles around $2,325 despite broad US Dollar’s weakness
Gold reversed its direction and rose to the $2,320 area, erasing a large portion of its daily losses in the process. The benchmark 10-year US Treasury bond yield stays in the red below 4.6% following the weak US PMI data and supports XAU/USD.
Bitcoin price makes run for previous cycle highs as Morgan Stanley pushes BTC ETF exposure
Bitcoin (BTC) price strength continues to grow, three days after the fourth halving. Optimism continues to abound in the market as Bitcoiners envision a reclamation of previous cycle highs.
Australia CPI Preview: Inflation set to remain above target as hopes of early interest-rate cuts fade
An Australian inflation update takes the spotlight this week ahead of critical United States macroeconomic data. The Australian Bureau of Statistics will release two different inflation gauges on Wednesday.