- AUD/USD is trading in the positive territory above 0.7300.
- US Dollar Index stays in the red below 92.50.
- Coronavirus vaccine optimism continues to boost risk appetite.
The AUD/USD pair edged lower to 0.7270 area during the Asian trading hours on Wednesday but didn’t have a difficult time reversing its direction. Supported by improving risk sentiment, the pair rose above 0.7300 and was last seen gaining 0.22% on the day at 0.7314.
The data from Australia showed that the Westpac Leading Index dropped to 0.12% in October from 0.23% in September. Meanwhile, Reserve Bank of Australia’s (RBA) Governor Phillip Lowe voiced his support for the RBA’s bond-buying programme. “It’s completely right for the government to borrow to support the economy right now,” Lowe added.
USD struggles to find demand on Wednesday
Later in the day, Pfizer announced that the vaccine it’s developing with BioNTech showed an effectiveness of 95% in the final efficacy analysis of phase three trial. Risk flows started to dominate financial markets after this report and helped the AUD preserve its strength against its rivals.
Reflecting the upbeat market mood, S&P 500 Futures are up 0.3% on a daily basis and the US Dollar Index is posting modest losses near 92.30.
Later in the session, Housing Starts and Building Permits will be featured in the US economic docket. More importantly, the Australian Bureau of Statistics will release the labour market data on Thursday. Investors expect the Unemployment Rate to rise to 7.2% from 6.9% in October. A disappointing jobs report could cause AUD/USD to lose its traction.
Technical levels to watch for
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