AUD/USD slumps below 0.7700 as market mood sours
- AUD/USD came under renewed bearish pressure in late American session.
- US Dollar Index extends daily rebound toward 91.50.
- Wall Street's main indexes trade deep in the negative territory.
After fluctuating around 0.7750 during the first half of the day, the AUD/USD pair came under renewed bearish pressure in the late American session and touched a daily low of 0.7691. As of writing, the pair was down 0.65% on the day at 0.7700.
USD capitalizes on safe-haven flows
The souring market mood and the broad-based USD strength weigh on AUD/USD. According to several reports, US President Biden will unveil his spending plan for families and child care and will propose to increase tax on the wealthy to pay for it.
Reflecting the negative impact of this headline on market sentiment, Wall Street's main indexes fell sharply and the US Dollar Index (DXY) pushed higher. At the moment, the S&P 500 Index is losing 0.7% on a daily basis and the DXY is up 0.3% at 91.37.
Earlier in the day, the data published by the US Department of Labor showed that the weekly Initial Jobless Claims declined to 547,000 in the week ending April 17. Although this reading came in better than the market expectation of 617,000, it failed to provide a boost to risk sentiment.
On Friday, the Commonwealth Bank's preliminary Services PMI and Manufacturing PMI for April will be featured in the Australian economic docket. Later in the day, investors will be paying close attention to the IHS Markit's Manufacturing and Services PMI figures for the US.
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.
