AUD / USD falls back to 0.7950 as safe-haven flows dominate markets

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  • AUD / USD turned south after climbing to multi-year highs above 0.8000.
  • The major Wall Street indices suffer heavy losses Thursday.
  • The US Dollar Index rebounds from multi-week lows and remains below 90.00.

The pair AUD/USD started the day on a solid footing after posting strong gains on Wednesday and broke above 0.8000 for the first time since February 2018. However, the negative shift observed in market sentiment forced the pair to reverse its direction in the second half. of the day. At time of writing, AUD / USD was down 0.15% on the day at 0.7955.

DXY bounces back amid sell-off of US stocks

Reflecting the risk averse market environment, the major Wall Street indices posted heavy losses on Thursday. At the moment, the S&P 500 Index is losing 1.5% on the day and the US Dollar Index (DXY), which fell to its lowest level in eight weeks at 89.68, is losing 0.35% to 89.86.

Meanwhile, the 10-year US Treasury yield is up more than 5% on the day, helping the USD stay resilient against rivals during US trading hours.

Hours earlier, the second estimate from the US Bureau of Economic Analysis showed that real Gross Domestic Product (GDP) expanded at an annual rate of 4.1% in the fourth quarter. Additionally, the US Department of Labor reported that initial weekly jobless claims declined to 730,000 and were much better than market expectations of 838,000. However, these optimistic readings did not help the risk flows return to the markets.

On Friday, the only data on the Australian economic docket will be private sector lending for January, which is unlikely to trigger a significant market reaction.

Technical levels

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