AUD / USD remains on track to close modestly below 0.7300

• AUD / USD continues to fluctuate below 0.7300 on Tuesday.
• The US dollar index struggles to preserve its bullish momentum.
• Westpac’s consumer confidence data will be included in the Australian economic agenda.

Following Monday’s rally in risk, the pair AUD/USD it is trading in a relatively tight range below 0.7300 on Tuesday as investors await the next significant catalyst. At time of writing, the pair was down 0.18% on the day at 0.7272.

DXY consolidates Monday’s earnings

After Pfizer announced that its coronavirus vaccine was more than 90% effective in phase three trials, global stock indices posted impressive gains and risk-sensitive currencies attracted investors. However, the strong rally observed in US Treasury yields helped the dollar to gain strength in the second half of the day and limited the rise of the AUD / USD.

The US Dollar Index (DXY) gained 0.65% on Monday, but failed to break above 93.00 and remained in a consolidation phase on Tuesday. At the moment, the index records small daily losses at 92.75. Meanwhile, the yield on the 10-year US Treasury, which rose more than 20% in the last two trading days, rose 2.5%.

Earlier in the day, Dallas Federal Reserve Chairman Robert Kaplan reiterated that negative interest rates were off the Fed’s table, but this comment had little to no impact on the USD’s performance against its pairs.

In the early hours of the Asian session on Wednesday, Australia’s Westpac consumer confidence data will be considered for further momentum. There will be no major data releases on the US economic calendar and trading conditions are likely to remain tight due to the US Veterans Day holiday.