- AUD/USD renewed monthly highs above 0.7800 on Tuesday.
- US Dollar Index retreats to 90.20 area ahead of American session.
- RBA reiterated that significant monetary support will be needed for some time.
The AUD/USD pair closed the first day of the week in the positive territory and continued to push higher during the Asian session on Tuesday. After touching its highest level in a month at 0.7806, however, the pair edged slightly lower and was last seen clinging to modest daily gains at 0.7790.
Eyes on Wall Street
In its February Meeting Minutes, the Reserve Bank of Australia reiterated that ver significant monetary support will be needed for some time and noted that there won’t be a rate hike until inflation steadies in the 2%-3% range. Nevertheless, the RBA’s publication didn’t offer anything new with respect to the policy outlook and the upbeat market mood allowed the risk-sensitive AUD to preserve its strength.
In the meantime, the greenback continues to have a difficult time finding demand as a safe-haven and the US Dollar Index (DXY) is trading at multi-week lows near 90.20, losing 0.3% on the day and helping AUD/USD stay in the positive territory.
The NY Empire State Manufacturing Index will be the only data featured in the US economic docket on Tuesday. Investors will keep a close eye on the performance of Wall Street’s main indexes following the long weekend. Currently, the S&P 500 Futures are up 0.45% on the day and the DXY is likely to remain on the back foot in case risk flows dominate the financial markets in the second half of the day.
Technical levels to watch for
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