- AUD/USD turned south following a rebound in early American session.
- US Dollar Index regained its traction after dropping on US CPI data.
- Wall Street’s main indexes turned negative on the day after opening higher.
The AUD/USD pair staged a rebound in the early American session and climbed above 0.7360 fueled by the broad-based USD weakness. However, the pair lost its momentum and quickly retraced its rally. As of writing, AUD/USD was trading at a fresh daily low of 0.7328, losing 0.5% on a daily basis.
USD capitalizes on risk-off flows
Earlier in the session, the data published by the US Bureau of Labor Statistics revealed that inflation, as measured by the Core Consumer Price Index (CPI), declined to 4% in August from 4.3% in July. This print came in lower than the market expectation of 4.2% and triggered a USD selloff.
However, the negative shift witnessed in market sentiment helped the greenback regather its strength and caused AUD/USD to turn south. The US Dollar Index, which fell to 92.32 after CPI data, is currently virtually unchanged on the day at 92.56.
US Inflation Quick Analysis: Team Transitory wins, dollar loses, why the trend may extend.
Reflecting the souring market mood, Wall Street’s main indexes are losing between 0.6% and 0.3% on the day.
On Wednesday, the Westpac Consumer Confidence data for September and the HIA New Home Sales figures for August will be featured in the Australian economic docket.