- US Dollar Index climbs to the highest level in more than a month.
- RBA’s Kent says they will adjust policy if needed to meet targets.
- Philly Fed’s Non-Manufacturing Index improves to 21.4 in June.
After closing the second straight trading day in the negative territory on Monday, the AUD/USD pair continued to edge lower on Tuesday pressured by the broad-based USD strength and was last seen trading at 0.7023, losing 0.16% on a daily basis.
Earlier today, Reserve Bank of Australia (RBA) Assistant Governor Kent said that the RBA was ready to adjust its policy to meet their set targets if needed. Kent further added that the likelihood of the bank introducing a quantitative easing program in Australia was very low. Nevertheless, the AUD largely ignored these comments and moved sideways during the Asian trading hours.
USD preserves strength on Tuesday
In the second half of the day, the broad-based USD strength weighed on the pair and forced it to turn south. The US Dollar Index, which tracks the greenback’s value against a basket of six major currencies, extended its rebound that started on Friday and rose above the 97.50 mark to touch its highest level since mid-June. Although there were no fundamental drivers fueling the DXY’s rally, the selling pressure surrounding the European currencies and the poor performance of safe-haven currencies such as the JPY and the CHF helps the USD outperform its peers.
The only data from the U.S. today showed that the Federal Reserve Bank of Philadelphia’s Non-Manufacturing Business Activity Index improved to 21.4 in July from 8.2 in June to provide an additional boost to the buck. At the moment, the DXY is up 0.35% on the day at 97.62.
Existing home sales and the Richmond Fed’s Manufacturing Index will ve featured in the US economic docket in the remainder of the session.
Technical levels to watch for
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