- AUD/USD is falling sharply pressured by broad USD strength.
- US Dollar Index is clinging to daily gains near 93.30.
- FOMC Chairman Jerome Powell’s is scheduled to deliver a speech on Monday.
In the absence of significant macroeconomic data releases from Australia at the start of the week, the risk-averse market environment made it difficult for the AUD to find demand. After closing the previous week virtually unchanged above 0.7300, the AUD/USD pair lost its traction and touched a daily low of 0.7254 on Monday. As of writing, the pair was down 0.33% on the day at 0.7265.
USD capitalizes on safe-haven flows
Resurfacing fears over the second wave of coronavirus crippling the global economic recovery weigh on market mood. Reflecting the intense flight-to-safety, major European equity indexes are losing more than 3% on the day and the S&P 500 futures are down around 1.5%.
The Chicago Fed’s National Activity Index will be featured in the US economic docket on Monday. More importantly, FOMC Chairman Jerome Powell is scheduled to deliver a speech at 1400 GMT.
Last week, Powell reiterated that the monetary policy will remain “highly accommodative” until they are sure the expansion is well along. However, Powell also acknowledged that the economic recovery over the last 60 days had been faster than expected.
Meanwhile, investors will be following political developments with regards to next coronavirus relief bill in the US closely. Ahead of the American session, the US Dollar Index (DXY) is up 0.3% on the day at 93.30.
Technical levels to watch for
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