- AUD/USD continues to fluctuate below 0.7300 on Tuesday.
- US Dollar Index struggles to preserve its bullish momentum.
- Westpac Consumer Confidence data will be featured in Australian economic docket.
Following Monday’s risk rally, the AUD/USD pair trades in a relatively tight range below 0.7300 on Tuesday as investors wait for the next significant catalyst. As of writing, the pair was down 0.18% on a daily basis at 0.7272.
DXY consolidates Monday’s gains
After Pfizer announced that its coronavirus vaccine was more than 90% effective in phase-three trials, global equity indexes registered impressive gains and risk-sensitive currencies attracted investors. However, the sharp upsurge witnessed in the US Treasury bond yields helped the greenback gather strength in the second half of the day and capped AUD/USD’s upside.
The US Dollar Index (DXY) gained 0.65% on Monday but failed to break above 93.00 and stayed in a consolidation phase on Tuesday. At the moment, the index is posting small daily losses at 92.75. Meanwhile, the 10-year US T-bond yield, which rose more than 20% in the last two trading days, is up 2.5%.
Earlier in the day, Dallas Federal Reserve President Robert Kaplan reiterated that negative interest rates were off the table for the Fed but this comment had little to no impact on the USD’s performance against its peers.
In the early trading hours of the Asian session on Wednesday, the Westpac Consumer Confidence data from Australia will be looked upon for fresh impetus. There won’t be any significant data releases featured in the US economic docket and the trading conditions are likely to remain thin due to the Veterans Day holiday in the US.
Technical levels to watch for
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