AUD/USD hovers around its daily low of 0.7000;

The AUD/USD pair is battling to break through the psychological level of 0.7000 and gives up its small intraday gains from the Asian session.

Spot prices are still at the mercy of the price dynamics of the US Dollar and have moved to the lower end of the daily range, roughly in the range of 0.6980 to 0.6975.

After a brief period of stabilization, the USD is aggressively bought up in response to the Japanese Yen sell-off that was initiated by the Bank of Japan.

Further enhancing the dollar’s relative safe-haven character is the cautious market atmosphere, which hurts the risk-averse Australian dollar.

This comes amid mounting concerns of a deeper global economic slowdown. Investors appear to be confident that the Fed’s aggressive posture would soften in the aftermath of decreasing inflationary pressures.

In addition, the likelihood that the Reserve Bank of Australia (RBA) will raise interest rates again in February is increasing, which bodes well for the possibility of some dip-buying in the AUD/USD pair.

This makes it wise to hold off on preparing for any significant corrective downturn until there is substantial follow-through selling before determining that spot prices have peaked out.

Traders are now anticipating significant US macro announcements, which might provide a further boost later on in the early North American session.

The publication of the Producer Price Index (PPI) and monthly Retail Sales numbers are on the agenda for Wednesday’s US economic events.

This will fuel USD demand and present traders with short-term chances in the AUD/USD pair, along with US bond rates and the general risk attitude.