AUD/USD drops to fresh 2021 lows below 0.7250 amid flight to safety
- AUD/USD continues to edge lower in the second half of the day.
- US Dollar Index posts strong daily gains above 93.00.
- Eyes on FOMC Chairman Jerome Powell's speech at 1730 GMT.
The bearish pressure surrounding the AUD/USD pair strengthened during the American trading hours on Tuesday and the pair touched its lowest level since November at 0.7243. As of writing, AUD/USD was down 1.15% on a daily basis at 0.7252.
Flight to safety drags AUD/USD lower
The risk-averse market environment and the broad-based USD strength continue to weigh on AUD/USD on the day. Reflecting the dismal market mood, Wall Street's three main indexes are losing between 1.1% and 1.3% while the US Dollar Index rising 0.55% at 93.12.
Earlier in the day, the Reserve Bank of Australia's (RBA) July meeting minutes revealed that the bank has acknowledged the fact that the coronavirus Delta variant is hurting the economic recovery and creating uncertainty with regard to outlook.
On the other hand, the data published by the US Census Bureau showed on Tuesday that Retail Sales contracted by 1.1% on a monthly basis in July, compared to the market consensus for a decrease of 0.2%. Although the Fed reported that Industrial Production expanded at a stronger-than-expected pace in July, this reading failed to help the sentiment improve.
Later in the session, FOMC Chairman Jerome Powell will be responding to questions after delivering his prepared remarks at a virtual event at 1730 GMT.
Technical levels to watch for