- AUD/USD turned south after closing in the positive territory on Tuesday.
- US Dollar Index rises above 90.50 supported by risk-off flows.
- Investors await FOMC's policy announcements, US Durable Goods Orders data.
The AUD/USD pair stayed relatively quiet below 0.7750 during the Asian trading hours but came under strong bearish pressure ahead of the American session. As of writing, the pair was down 0.7% on the day at 0.7690.
USD capitalizes on safe-haven flows
The dismal market mood on Wednesday is helping the safe-haven greenback outperform its rivals. The US Dollar Index, which closed in the negative territory on Tuesday, is currently up 0.44% at 90.55. Reflecting the risk-averse market environment, the S&P 500 Futures are down 1.3% on the day, suggesting that Wall Street's main indexes will start the day deep in the red.
The US Census Bureau will publish the Durable Goods orders data for December. More importantly, the FOMC will announce its rate decision and publish the policy statement following the first meeting of 2021.
Previewing the FOMC event, "we expect changes to the FOMC statement to be fairly minor, consistent with no plans for policy changes anytime soon," said TD Securities analysts. "The chairman will likely remain dovish on the policy outlook in his press conference even as he expresses some optimism about growth in the year ahead—with vaccines and fiscal stimulus ultimately contributing to strength."
Earlier in the day, the data from Australia showed that the Consumer Price Index (CPI) declined to 0.9% in the fourth quarter from 1.6%. Although this reading came in slightly higher than the market expectation of 0.7%, it failed to trigger a significant market reaction.
Technical levels to watch for
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.