AUD/USD renews multi-year highs, closes in on 0.7500
- AUD/USD is posting impressive daily gains on Wednesday.
- Risk flows provide a boost to AUD ahead of American session.
- US Dollar Index stays below 91.00 despite a modest rebound.
Following a three-day consolidation period, the AUD/USD gained traction on Wednesday and rose to its highest level since July 2018 at 0.7485. As of writing, the pair was up 0.92% on the day at 0.7480.
Earlier in the day, the data from Australia showed that the Westpac Consumer Confidence in December improved to 4.5% from 2.1% in November and helped the AUD start the day on a strong footing.
Broad-based USD weakness helps AUD/USD push higher
Additionally, the risk-positive market environment allowed AUD to gather strength while making it difficult for the greenback to find demand on Wednesday. Heightened hopes about US lawmakers reaching a deal on the coronavirus aid bill ahead of the new year seem to have provided a boost to sentiment. Reflecting the upbeat market mood, the S&P 500 Futures trade in the positive territory and the 10-year US Treasury bond yield is up 2.5% on the day.
Later in the day, Wholesale Inventories and JOLTS Job Openings will be the only data featured in the US economic docket. Investors are likely to ignore these figures and remain focused on risk perception. If Wall Street's main indexes notch new all-time highs, the US Dollar Index, which is currently losing 0.18% at 90.80, could extend its daily slide.
On Thursday, the Reserve Bank of Australia (RBA) will publish its Bulletin and the Melbourne Institue will release Consumer Inflation Expectations for December.
Technical levels to watch for