- AUD / USD turned south after making a modest bounce early in the European session.
- The US Dollar Index is based on Tuesday’s gains and is approaching 91.00.
- Retail sales, industrial production data, and FOMC Minutes highlight the US economic agenda.
The pair AUD/USD It advanced above 0.7800 for the first time in nearly a month on Tuesday, but ended up closing the day in negative territory amid renewed USD strength. On Wednesday, the pair is struggling to make a significant bounce and was last seen shedding 0.22% on the day at 0.7740.
USD capitalizes safe haven flows
On Wednesday, the gloomy market mood is making it difficult for the risk-sensitive AUD to find demand, while helping the USD retain its strength. The US Dollar Index is currently up 0.37% on the day at 90.84. Earlier in the day, Australia’s leading westpac index improved to 0.26% in January from 0.12%, but failed to give AUD / USD a boost.
Later in the session, the US Census Bureau’s January retail sales report will be examined for fresh momentum. Investors expect retail sales to rise 1% after declining 0.7% in December. In addition, the US Federal Reserve will release industrial production and capacity utilization figures. Finally, the FOMC will publish the Minutes for the February meeting.
Nonetheless, the market reaction to these events is likely to remain short-lived and the perception of risk could continue to be the main driver of the USD valuation in the second half of the day. For now, S&P 500 futures are posting small daily losses and a rally in major Wall Street indices could weigh on the USD and vice versa.
In the early trading hours of the Asian session on Thursday, market participants will closely follow the Australian employment report.
Technical levels
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