AUD/USD erases losses as Aussie Building Permits surge

• AUD/USD trades flat near 0.7612 versus 0.76 early Wednesday. 
• Australia’s Building Permits surged by over 20% in December. 
• The focus now shifts to the RBA Governor’s speech.

AUD/USD has bounced from session lows, with key economic data painting a positive picture of the Australian housing market. 

Australia’s Building Permits surged by 22.8% year-on-year in December, following November’s 15% increase, the Australian Bureau of Statistics reported at 00:30 GMT. Month-on-month, approvals surged 10.9% in December versus 2.6% in November. 

The pair is now trading largely unchanged on the day near 0.7612, having hit a low of 0.7602 early today. The Aussie could extend gains, as the futures tied to the S&P 500 are trading 0.3% higher. 

The risk sentiment looks to have strengthened, with signs of easing coronavirus pandemic and the US Treasury Secretary Janet Yellen’s comment that a spending package is desperately needed. Top Democrats filed a joint $1.9 trillion budget measure in a step toward bypassing Republicans on Monday.

Yellen and the International Monetary Fund head discussed the need for multilateral solutions to many issues facing the global economy, including debt problems, the Treasury Department said on Tuesday.

Apart from the broader market sentiment, the pair could take cues from the RBA Governor Lowe’s speech due in about 30 minutes. The central banker is likely to reiterate the bank’s wait-and-watch mode. 

Technical levels