AUD/USD clings to daily gains near 0.6580 ahead of US GDP data
- US Dollar Index drops toward mid-98s on Thursday.
- 10-year US Treasury bond yield renews all-time lows.
- Real GDP in US is expected to expand by 1.4% in fourth quarter.
After posting its lowest daily close in more than 10 years at 0.6540 on Wednesday, the AUD/USD pair capitalized on the broad-based USD weakness and staged a rebound on Thursday. As of writing, the pair was up 0.55% on a daily basis at 0.65.78.
Earlier in the day, the data published by the Australian Bureau of Statistics revealed that the Private Capital Expenditures in the fourth quarter declined by 2.8% to miss the market expectation for an increase of 0.4% by a wide margin. Despite the disappointing data, however, the pair preserved its recovery momentum as the falling US Treasury bond yields continued to weigh on the greenback.
USD struggles to find demand ahead of key data
Heightened concerns over the coronavirus outbreak having a long-lasting negative impact on the global economy forced investors to seek refuge in safe-haven US Treasury bonds to and dragged their yields lower. With the 10-year reference erasing more than 4% and slumping to a fresh record low on Thursday, the US Dollar Index (DXY) dropped to its worst level since February 10th.
Ahead of the US Bureau of Economic Analysis' second estimate of the fourth-quarter GDP growth, the DXY is losing 0.52% on the day at 96.63. Investors will be keeping a close eye on T-bond yields' and Wall Street's performance as well.
Durable Goods Orders, Initial Jobless Claims and Pending Homes Sales data will be featured in the US economic docket as well.
Technical levels to watch for