- AUD / USD took a 180 degree turn after falling towards 0.7600.
- The US dollar index fell to fresh two-week lows in the US session.
- The yield on 10-year US Treasuries fell more than 3% on Tuesday.
The pair AUD/USD it came under modest downward pressure during European trading hours and fell towards 0.7600 before reversing its course in the second half of the day. At time of writing, the pair was up 0.18% on the day at 0.7662.
DXY appears to close in negative territory for the second day in a row
The USD market valuation remains the main driver of the AUD / USD movements on Tuesday and investors remain focused on US Treasury yields amid the lack of major macroeconomic data releases.
With the yield on the benchmark 10-year US Treasury losing more than 3%, the US dollar index (DXY) fell to its worst level in two weeks at 92.33 and fueled the rally in AUD / USD. Currently, the DXY is down 0.25% to 92.36.
Earlier in the day, the Reserve Bank of Australia (RBA) announced that it left its policy rate unchanged at 0.1% as expected. In its policy statement, the Rba reiterated that it will not increase the cash rate until inflation remains sustainably within the 2-3% target range. On a positive note, “the economic recovery in Australia is on track and stronger than expected,” the RBA noted, but failed to trigger a significant market reaction.
On Wednesday, Composite and Services PMI data from the Commonwealth Bank of Australia will be considered for further momentum.