AUD/USD edges lower toward 0.6900 as focus shifts to US data
- AUD/USD reversed its course after climbing to a daily high of 0.6975.
- RBA says it will not increase policy rate until progress is made on employment.
- US Dollar Index posts modest gains above 97.00 ahead of key US data.
The AUD/USD pair capitalized on the risk-off flows and climbed to a daily high of 0.6975 on Tuesday but erased its daily gains ahead of the American session. As of writing, the pair was down 0.05% on the day at 0.6915.
Earlier in the day, the minutes of the Reserve Bank of Australia's (RBA) June meeting showed that the bank is not looking to hike its policy rate until progress is made on employment and inflation targets. The RBA further noted that they are prepared to scale up bond purchases again if necessary.
USD starts erasing Monday's losses
In the second half of the day, the US Dollar Index (DXY), which came under bearish pressure after the Fed announced that it will start purchasing corporate bonds in secondary markets, staged a rebound to force the pair to retreat.
Ahead of the Retail Sales and Industrial Production data from the US, the DXY is up 0.12% on the day at 96.73. In the absence of significant fundamental drivers, rising US Treasury bond yields seem to be helping the greenback find demand.
In addition to the macroeconomic data releases, investors will be keeping a close eye on Jerome Powell's, Chairman of the Federal Reserve, testimony before the Senate Banking Committee.
On Wednesday, the HIA New Home Sales and Westpac Leading Index will be featured in the Australian economic docket.
Technical levels to watch for