AUD / USD cuts much of daily gains, trading near 0.7450

  • AUD / USD turns south during US business hours.
  • The US dollar index experiences a decisive rally, rising above 91.00.
  • Focus shifts to Australian consumer inflation expectations data.

The pair AUD/USD It rose to its highest level since July 2018 at 0.7485 on Wednesday, but struggled to preserve its bullish momentum in the second half of the day. At time of writing, the pair was trading at 0.7449, gaining 0.5% on the day.

Earlier in the day, the AUD picked up steam after data released by the Melbourne Institute of the Faculty of Economics and Commerce showed that consumer confidence in Australia continued to strengthen in December. Additionally, market optimism, reflected by rising global equity indices, helped the risk-sensitive AUD continue to outperform its rivals.

DXY bounces above 91.00 after initial drop

However, in the early trading hours of the US session, the US Dollar Index (DXY) made a decisive recovery and caused AUD / USD to turn south. At the moment, the DXY, which fell to a daily low of 90.69, is up 0.2% on the day at 91.15.

In the absence of major macroeconomic data releases, the strong rally seen in the DXY could be attributed to investors turning on the sidelines at the end of the European session. The President of the European Commission, Ursula von der Leyen, and the British Prime Minister, Boris Johnson, will meet at 19:00 GMT and the outcome of this meeting will be the next significant catalyst in market sentiment.

On Thursday, data on consumer inflation expectations will be included in the Australian economic docket. In addition, the Reserve Bank of Australia will publish its Bulletin.

Technical levels

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