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  • AUD/USD preserves its bullish momentum during the American session.
  • Falling Treasury bond yields continue to weigh on the greenback.
  • US Dollar Index drops to fresh three-week lows below 92.00.

The AUD/USD pair dropped below 0.7600 ahead of the American session but staged an impressive rebound in the second half of the day. As of writing, the pair was up 0.22% on a daily basis at 0.7639.

USD selloff picks up steam after CPI data

During the European trading hours, the cautious market mood and the broad-based USD strength amid rising US T-bond yields weighed on AUD/USD. However, the greenback came under strong pressure after the monthly data published by the US Bureau of Labor Statistics revealed that the inflation increase in March was not as significant as speculated.

On a yearly basis, the Core Consumer Price Index (CPI), which excludes volatile food and energy prices, in the US rose to 1.6% from 1.3% in February and came in slightly higher than the market expectation of 1.5%.

With the initial reaction to the data, the benchmark 10-year US Treasury bond yield turned south and caused the US Dollar Index (DXY) to lose its traction. At the moment, the DXY is losing 0.22% and trading at its lowest level in three weeks at 92.86, while the 10-year US T-bond yield is falling 2.65%.  

On Wednesday, the Westpac Consumer Confidence Index will be featured in the Australia economic docket. Later in the session, FOMC Chairman Jerome Powell’s speech will be watched closely by market participants.

Technical levels to watch for