AUD/USD falls below 0.7700 for the first time in more than a week
- AUD/USD remains on the back foot following Wednesday's slump.
- US Dollar Index stays in the positive territory below 91.00.
- Eyes on Initial Jobless Claims and PPI data from US.
The AUD/USD pair suffered its biggest one-day loss since late March on Wednesday and seems to be having a difficult time staging a rebound on Thursday. As of writing, the pair was trading at its lowest level since May 4 at 0.7695, losing 0.35% on a daily basis.
Focus shifts to mid-tier US data
The US Bureau of Labor Statistics monthly report revealed on Wednesday that annual inflation, as measured by the Consumer Price Index, climbed to 4.2% in April from 2.6% in March. This print surpassed the market consensus of 3.6% by a large margin and triggered a rally in the US Treasury bond yields. Consequently, the greenback started to outperform its rivals and the US Dollar Index rose 0.67%.
On Thursday, the DXY is posting small daily gains around 90.80, not allowing AUD/USD to stage a rebound. Furthermore, the risk-averse market environment, as reflected by more-than-1% declines in major European equity indexes, is helping the USD stay strong against its major rivals.
Later in the session, the US Department of Labor will release its weekly Initial Jobless Claims data. Additionally, the Producer Price Index (PPI) figures will be watched closely by market participants. A stronger-than-expected PPI print and a selloff in US stocks could provide another boost to the USD in the second half of the day.
On Friday, Consumer Inflation Expectations and HIA New Home Sales data will be featured in the Australian economic docket.
Technical levels to watch for