Aussie bears eyeing the 0.6800 handle
Forex News

AUD/USD drops to fresh daily lows near 0.6730 as DXY climbs to multi-month highs

  • Australia’s trade surplus narrowed more than expected in December.
  • US Dollar Index rose to its highest level since mid-October.
  • Coming up: RBA Governor Lowe speech and AiG’s Performance of Services Index.

The AUD/USD pair posted decisive gains during the first half of the week on the back of the Reserve Bank of Australia’s (RBA) optimistic tone and some upbeat macroeconomic data releases from Australia but struggled to push higher on Thursday. With the broad-based USD strength dominating the markets, the pair retraced a portion of its rally and was last down 0.12% on the day at 0.6736.

Earlier in the day, the Australian Bureau of Statistics reported that the trade surplus in December narrowed 5.2 billion AUD to cap the pair’s upside. Furthermore, the National Australia Bank’s Business Confidence Index in the fourth quarter stayed unchanged at -1 to miss the market expectation of 3.

In the early trading hours of the Asian session, RBA Governor Lowe will be delivering a speech and the AiG will publish its Performance of Services Index.

USD preserves strength ahead of NFP

On the other hand, the US Dollar Index on Thursday advanced to its highest level since the second week of October at 98.57 to further weigh on the pair. Dallas Fed President Kaplan said that the coronavirus outbreak was unlikely to impact the Federal Reserve’s policy stance and reiterated that he was expecting the policy rate to remain unchanged throughout 2020.

Additionally, the US Bureau of Labor Statistics reported that the Nonfarm Labor Productivity in the fourth quarter improved to +1.4% from -0.2% and Unit Labor Costs rose 1.4% as expected. As of writing, the index was up 0.2% on the day at 98.45.

Nonfarm Payrolls (NFP) report on Friday will be the last significant catalyst of the week for the greenback.

Technical levels to watch for

 

Source Link