AUD/USD climbs above 0.6950 as USD selloff intensifies
- AUD/USD rebounds during American session on broad USD weakness.
- US Dollar Index slumps below 97.00 after ECB announcements.
- AiG Performance of Services Index will be featured in Australian economic docket.
The AUD/USD pair spent the first half of the day moving sideways a little below the 0.6900 as the cautious market mood made it difficult for the AUD to preserve its strength. During the American session, however, the pair gained traction and rose to a fresh daily high of 0.6957. As of writing, the pair was up 0.5% on the day at 0.6952.
DXY slumps below 97
The broad-based selling pressure surrounding the greenback seems to be allowing the pair to push higher on Thursday. After staying relatively quiet around 97.50 for the majority of the day, the US Dollar Index (DXY) fell sharply and is now losing 0.5% at 96.85.
The sharp upsurge witnessed in the EUR/USD pair following the European Central Bank's monetary policy announcements seems to be the primary reason behind the USD weakness. The ECB decided to expand its Pandemic Emergency Purchase Programme (PEPP) by €600 billion and provided a boost to risk sentiment.
On the other hand, the data from the US revealed that 1.87 million American applied for unemployment benefits last week and the trade deficit widened to $49.4 billion in April. Nevertheless, these figures were largely ignored by the market participants.
In the early trading hours of the Asian session on Friday, the Aig's Performance of Services Index for May will be featured in the Australian Economic docket.
Technical levels to watch for