The AUD/USD pair dropped to a daily low of 0.7637 on Monday but staged a rebound in the late American session. Nevertheless, the pair remains on track to close the fourth straight day in the negative territory and was last seen losing 0.18% at 0.7672.
The USD’s market valuation remains the primary driver of AUD/USD’s movements at the start of the week. Supported by the ongoing increase in the US Treasury bond yields, the US Dollar Index (DXY) extended its rally to its highest level since November at 92.41 before going into a consolidation phase. At the moment, the DXY is up 0.35% on the day at 92.30 and the 10-year US Treasury bond, which gained more than 2% earlier in the day, is rising 1.7% at 1.592%.
The only data from the US showed that Wholesale Inventories in January increased by 1.3%. However, with this reading coming in line with the market expectation, investors’ reaction was largely subdued.
In the early trading hours of the Asian session on Tuesday, the National Bank Australia’s (NAB) Business Confidence and Business Conditions indexes for February will be looked upon for fresh impetus.
There won’t be any significant macroeconomic data releases featured in the US economic docket on Tuesday but the outcome of the 3-year note auction at 1800 GMT could have an impact on yields and, consequently, the DXY.