- AUD/USD turned south after rising to multi-year highs above 0.8000.
- Wall Street’s main indexes suffer heavy losses on Thursday.
- US Dollar Index rebound from multi-week lows, stays below 90.00.
The AUD/USD pair started the day on a strong footing after posting strong gains on Wednesday and broke above 0.8000 for the first time since February 2018. However, the negative shift witnessed in market sentiment forced the pair to reverse its direction in the second half of the day. As of writing, AUD/USD was down 0.15% on the day at 0.7955.
DXY rebounds amid US stocks selloff
Reflecting the risk-averse market environment, Wall Street’s main indexes are posting large losses on Thursday. At the moment, the S&P 500 Index is losing 1.5% on the day and the US Dollar Index (DXY), which fell to its lowest level in eight weeks at 89.68, is losing 0.35% at 89.86.
Meanwhile, the 10-year US Treasury bond yield is up more than 5% on the day, helping the USD stay resilient against its rivals during the American trading hours.
Earlier in the day, the second estimate of the US Bureau of Economic Analysis showed that Real Gross Domestic Product (GDP) expanded at an annual rate of 4.1% in the fourth quarter. Furthermore, the US Department of Labor reported that weekly Initial Jobless Claims declined to 730K and came in much better than the market expectation of 838K. Nevertheless, these upbeat readings failed to help risk flows return to markets.
On Friday, the only data featured in the Australian economic docket will be Private Sector Credit for January, which is unlikely to trigger a significant market reaction.
Technical levels to watch for
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