AUD/USD climbs to fresh yearly highs above 0.7070
- AUD/USD pair is pushing higher after closing above 0.7000 on Monday.
- US Dollar Index continues to edge lower pressure by risk-on flows.
- RBA's Lowe sees no need to intervene in AUD's exchange rate.
The AUD/USD pair started the week on a strong footing and closed above 0.7000 on Monday. With the risk-sensitive AUD capitalizing on risk-on flows, AUD/USD stretched higher on Tuesday and touched its best level since July 2019 at 0.7072. As of writing, the pair was up 0.76% on the day at 0.7065.
USD selloff continues
Earlier in the day, the Reserve Bank of Australia's (RBA) Meeting Minutes offered no surprises with regards to the monetary policy outlook. Meanwhile, RBA Governor Phillip Lowe said that the AUD's valuation was broadly in line with fundamentals and added that they don't see the need to intervene in the foreign exchange market to push down the currency.
On Wednesday, the Australian Bureau of Statistics will release the Retail Sales data for June.
On the other hand, the sharp upsurge witnessed in major European equity indexes on Tuesday continues to weigh on the safe-haven USD. At the moment, the US Dollar Index is losing 0.16% on the day at 95.66.
As investors cheer the EU's agreement on the budget and the recovery fund, Germany's DAX 30 and the Euro Stoxx 50 indexes are up 1.9% and 1.5%, respectively.
There won't be any significant macroeconomic data releases in the second half of the day and investors are likely to remain focused on Wall Street's performance. As of writing, S&P 500 futures were up 0.8% on the day, suggesting that the USD could struggle to stage a recovery during the American session.
Technical levels to watch for