- AUD / USD struggles to take advantage of this week’s gains.
- The US Dollar Index recovers towards 90.50 after an initial decline.
- The focus shifts to US consumer price index (CPI) data.
The pair AUD/USD it closed the third consecutive trading day in positive territory on Tuesday and was relatively quiet during Wednesday’s Asian session. After advancing to a session high of 0.7753 on the European morning, the pair lost its traction and was last seen posting small daily losses at 0.7728.
USD remains resilient against rivals ahead of inflation data
Data from Australia on Wednesday showed that Westpac’s February Consumer Confidence Index improved to + 1.9% from -4.5% in January and supports the market expectation of -3% by a wide margin. However, the AUD was unable to capitalize on this upbeat data.
On the other hand, the selling pressure surrounding the dollar appears to have eased on Wednesday and the yield on the US 10-year Treasury remained stable after losing more than 1% on Tuesday. At the moment, the US Dollar Index is virtually unchanged on the day at 90.42.
Later in the session, the US Consumer Price Index (CPI) data will be revised for further momentum. Although the Federal Reserve uses the Personal Consumption Expenditure Price Index (PCE) as its preferred indicator of inflation, a higher than expected reading could help the USD gain strength. Investors expect the underlying CPI to decline to 1.5% in January from 1.6% in December.
Technical levels
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