- AUD/USD near the round number 0.7200.
- The US dollar gains strength as the risk-off mood continues.
- Australian central bank official’s comment weighs on the AUD.
During the early European session, the AUD/USD fell below 0.7200 to touch its one-month lows. The sell-off in the previous two trading days continued on Tuesday as the fears of another round of coronavirus infections increased the probability of a lockdown. The risk-off mood helped the greenback to fuel some up-move, and it weighed on the AUD/USD.
RBA Deputy Governor Guy Debelle commented that a lower exchange rate would be undoubtedly beneficial for the economy. The official also said that the economy is witnessing a gradual but uneven recovery. On the positive side for the AUD, Debelle doesn’t see central bank intervention to be useful as the currency is broadly in line with the economic fundamentals.
The Fed Chair Jerome Powell might stick to keeping a lower interest rate for longer policy-wordings during his congressional testimony later today. The US dollar momentum has turned a bit slow on such an expectation, and traders might wait before renewing selling that started from the year highs above 0.7400 area.
Existing Home Sales and Richmond Manufacturing Index are the significant events in the US economic docket today, and the traders will gauge the broader risk dynamics from the greenback’s reaction to the data.