- AUD/USD is down a few points from a fresh multi-month high reached this Thursday.
- A combination of factors is helping to reignite demand for the USD and putting pressure on the major pairs.
- The falls remain pending the advance of the US GDP in the fourth quarter.
- US GDP Advance Report
The pair AUD/USD it fails to capitalize on its modest intraday gains and falls back a few points from the high reached on August 11 this Thursday. The pair manages to stay just above the 0.7100 level during the first half of the European session and remains at the mercy of the price dynamics of the US dollar.
In fact, the DXY Dollar Index, which measures the performance of the dollar against a basket of currencies, gains some positive traction and recovers from an eight-month low, which in turn caps AUD/USD gains. . The modest rebound in US Treasury yields appears to be giving the dollar some support. Apart of this, a softer tone around stock marketsamid concerns of a deeper global economic downturn, benefits the safe-haven dollar and acts as a headwind for the risk-sensitive AUD.
The dollar’s intraday rally could also be attributed to some repositioning before the publication of the US advanced GDP. of the fourth quarter, which will be published later during the American session. That being said, the prospects for less aggressive Fed tightening should constrain the dollar. In addition, the expectations for a new rate hike by the Reserve Bank of Australia (RBA) in February, bolstered by Wednesday’s National CPI report, could continue to provide some support for AUD/USD.
This fundamental undercurrent favors the bulls and supports prospects for a continuation of the recent rally seen over the past month. Market participants, however, appear reluctant, preferring to wait on the sidelines before important US macroeconomic releases on Thursday: fourth-quarter GDP data, durable goods orders and new home sales. Attention will then turn to the US Core PCE Consumer Price Index. on Friday, which will influence the Fed’s interest rate strategy.
AUD/USD technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
