The AUD/USD pair touched its highest level in nearly three years at 0.7983 on Tuesday but failed to preserve its bullish momentum. As of writing, the pair was down 0.15% on the day at 0.7903.
The USD’s market valuation continues to drive AUD/USD’s movements in the absence of significant fundamental drivers. On Monday, the US Dollar Index (DXY) lost 0.4% and closed in the negative territory for the third straight day. The negative shift witnessed in risk sentiment on Tuesday helps the greenback find some demand and the DXY was last seen rising 0.16% on the day at 90.15.
Mirroring the sour market mood, the S&P 500 Futures are down 0.4%, suggesting that the USD could preserve its strength in the second half of the day with Wall Street’s main indexes edging lower after the opening bell.
Meanwhile, investors are waiting for FOMC Chairman Jerome Powell to deliver his remarks at his semi-annual testimony before the Senate Banking Committee. Powell is not expected to change his tone regarding the policy outlook and likely to reiterate that the Fed will preserve the highly accommodative stance.
Additionally, the Conference Board’s Consumer Confidence report for February will be looked upon for fresh impetus later in the session.
On Wednesday, the fourth-quarter Wage Price Index will be featured in the Australian economic docket.