- AUD / USD turned south after a rally early in the US session.
- The US dollar index regained its traction after falling in the US CPI data.
- The major Wall Street indices turned negative for the day after opening higher.
The pair AUD/USD it saw a rally early in the US session and rose above 0.7360 driven by widespread USD weakness. However, the pair lost its momentum and quickly retraced its rally. At time of writing, the AUD / USD is trading at a fresh daily low of 0.7328, shedding 0.5% on the day.
USD capitalizes on risk aversion flows
Earlier in the session, data released by the US Bureau of Labor Statistics showed that inflation, as measured by the Basic Consumer Price Index (CPI), fell to 4% in August from 4.3% in July. . This figure disappointed the market expectation of 4.2% and triggered a sell off of USD.
However, the observed negative change in market sentiment helped the dollar regain its strength and caused the AUD / USD to turn south. The US Dollar Index, which fell to 92.32 after the CPI data, is virtually unchanged on the day at 92.56.
Reflecting the bitter market mood, the major Wall Street indices are losing 0.6% to 0.3% on the day.
On Wednesday, Westpac consumer index data for September and HIA new home sales figures for August will be included on the Australian economic docket.
Technical levels
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