- AUD/USD continues to fluctuate in a tight range above 0.7100.
- RBA’s Debelle adopted an optimistic tone with regards to the growth outlook.
- US Dollar Index struggles to push higher above 93.00 ahead of US data.
The AUD/USD pair is struggling to find direction for the second straight day on Tuesday and continues to fluctuate in a narrow band above 0.7100. As of writing, the pair was up 0.12% on a daily basis at 0.7130.
Upbeat RBA commentary supports AUD
During the Asian trading hours on Tuesday, the Reserve Bank of Australia’s (RBA) Deputy Governor, Guy Debelle, said that he expects to positive economic growth in the third quarter. Additionally, Debelle noted that the negative impact of the coronavirus outbreak in Victoria was likely to be smaller than initially anticipated. These optimistic comments helped the AUD show some resilience against its rivals.
On the other hand, the improving market sentiment, as reflected by modest gains witnessed in the S&P 500 futures, is making is difficult for the greenback to preserve its strength.
Ahead of the Durable Goods Orders and the CB Consumer Confidence data from the US, the US Dollar Index is staying in the negative territory a little below 93.00.
On Wednesday, the third quarter inflation report from Australia will be looked upon for fresh impetus. Markets expect the annual Consumer Price Index (CPI) to rise to 0.7% from -0.3% in the second quarter. If the CPI reading comes in lower than analysts’ estimate, investors could start pricing an RBA rate cut and the AUD could lose its strength.
Technical levels to watch for
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