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AUD/USD consolidates daily gains below 0.6750

  • NZD/USD pair's sharp upsurge boosts AUD/USD on Wednesday.
  • US Dollar Index continues to inch lower for second straight day.
  • FOMC Chairman Powell to testify again at 15:00 GMT.

After closing the first two days of the week in the positive territory, the AUD/USD pair continues to push higher on Wednesday. As of writing, the pair was trading slightly below the six-day high that it set at 0.6750 earlier in the day, adding 0.45% on a daily basis. 

AUD gathers strength on NZD rally, upbeat data

The sharp upsurge witnessed in the NZD/USD pair on Wednesday provided a boost to the positively-correlated AUD/USD pair as well. The Reserve Bank of New Zealand's hawkish policy outlook with no further rate cuts in 2020 allowed the NZD/USD pair to add more than 1%.

Additionally, reports pointing out to an increase in the recovery rate of coronavirus patients helped China-proxy AUD preserve its strength. In the meantime, the Westpac Consumer Confidence Index in Australia improved to +2.3% in February from -1.8% and came in stronger than the market expectation of +1.4%.

On the other hand, the greenback is having a difficult time finding demand in the risk-on environment with the US Dollar Index inching lower for the second straight day. Later in the session, FOMC Chairman Powell will testify before the House Financial Services Committee. On the first day of his testimony on Tuesday, Powell refrained from delivering any fresh clues regarding the Fed's policy outlook. At the moment, the US Dollar Index is posting small losses at 98.72.

In the early trading hours of the Asian session on Thursday, Consumer Inflation Expectations data from Australia will be looked upon for fresh impetus.

Technical levels to watch for

 

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