AUD/USD rebounds above 0.7900 as DXY recovery remains limited
- AUD/USD is posting small daily losses around 0.7900.
- US Dollar Index holds above 90.00 during the American session.
- Fed's Powell doesn't expect inflation dynamics to change in the near-term.
The AUD/USD pair declined to a session low of 0.7880 in the early trading hours of the American session but staged a modest rebound. As of writing, the pair was down 0.15% on a daily basis at 0.7905.
DXY fails to gather momentum during Powell's testimony
With Wall Street's main indexes starting the day deep in the negative territory, the USD gathered strength against its rivals as a safe-haven and the US Dollar Index (DXY) edged higher to 90.26. However, the DXY struggled to preserve its bullish momentum during FOMC Chairman Powell's testimony before the Senate Banking Committee.
Powell downplayed concerns over an uncontrolled rise in inflation and said that he doesn't expect inflation dynamics to change in the near-term. "We don't see how a burst in fiscal support or spending would lead to high inflation," Powell added and said they have the tools to deal with "unwanted inflation." At the moment, the DXY is up 0.17% on the day at 90.16.
Earlier in the day, the data published by the Conference Board showed that the Consumer Confidence Index in February improved to 91.3 to beat the market expectation of 90 but this reading was largely ignored by market participants.
During the Asian session on Wednesday, the Wage Price Index for the fourth quarter will be published from Australia.
Technical levels to watch for