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The AUD/USD pair is advancing amid positive market sentiment. The Dollar Index has plummeted below 113.00 despite hawkish commentary from the Fed policymaker.
The AUD/USD pair is witnessing a mark-up inventory accumulation phase after displaying a juggernaut rally to near 0.6530.
The pair is expected to extend its recovery and will march towards the critical 0.6600 mark. Earlier on Wednesday, the AUD, as a commodity-linked currency, firmly rebounded after dropping to near 0.6360. The major advanced vertically as investors shrugged off pessimism and poured funds into the risk-sensitive currencies.
The US dollar index fell deeply after failing to sustain above the critical 114.50 mark. A failure in hitting the round-level resistance of 115.00 dragged the DXY sharply to near 112.71. This indicates that risk sentiment has turned positive for a while after Fed policymakers advocated the current pace of hiking interest rates.
US GDP data, on will be carefully watched. The annualized data for the second quarter is expected to decline by 0.6%, similar to the prior reading.
The Australian dollar, however, has benefitted from better-than-projected monthly Retail Sales data. The economic data landed at 0.6%, higher than the estimates of 0.4%, but lower than the prior release of 1.3%.
