- AUD/USD posts remarkable gains in the Asian session.
- US Treasury yields, improved risk appetite underpins the demand for the US dollar.
- Upbeat economic data, higher commodity prices favor the Aussie.
The AUD/USD pair edges higher on Wednesday staging a remarkable comeback from the previous day’s dull market movement.
At the time of writing, the AUD/USD pair is trading at 0.7781, up 0.36% for the day.
On the economic data, the Australian Construction Output rose 2.4% in Q1, against the market consensus at 2.2%. The Westpac- Melbourne Institute Leading Economic Index grew at 0.2% in April. The readings indicate a pick up in the economic activities that boosted the aussie sentiment.
In addition to that, rising commodity prices, while gold surpasses the $1900 mark added to the optimism of growth and reflects a rebound in the economy across regions as consumption increases.
Having said that, rising coronavirus cases in Victoria, the second most populous state in Australia could call for a ‘snap lockdown’.This could negatively impact the prospects for more gains for the perceived riskier aussie.
On the other hand, the US dollar index remained depressed near the multi-month lows at 89.60. The Fed continued to downplay the inflation fears and referred to the fear as ‘transitory’. The remarks dulled the prospects of rate hike expectations in the June policy meeting. This, in turn, drives the US benchmark 10-year yields lower at 1.57% keeping investors away from the US dollar.
It should be noted that S&P 500 Futures trades higher at 4,198 with 0.30% gains for the day, which points to improved risk sentiment.
As for now, market participant eagerly awaits for the release of US Durable Goods, Gross Domestic Product (GDP), Initial jobless claims, and Personal Consumption Expenditure(
PCE) data to gauge the market sentiment.
AUD/USD Additional Levels
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