The Aussie dollar has made another drive through US dollar parity overnight driven by broad based greenback weakness which fell under the weight of an investor search for yield. The US dollar index which measures the value of the greenback compared to that of six major counterparts is current down 0.40 per cent to 78.248. US Equities wiped away Tuesday's losses with moderately positive economic feedback kept momentum after US building permits and house starts rose above economists' expectations. The local unit spent the much of the US session below US dollar par but broke out of a range after the FOMC minutes we're released, albeit not directly coinciding with the release. The Federal Open Market Committee minutes from January's meeting provided a slightly more hawkish outlook. The minutes showed while specific areas of the economy have shown improvement, stubbornly high unemployment remains the Fed's key stumbling block. Nevertheless the fed acknowledged the recent theme of strength in economic data and upgraded growth forecasts from 3.4 percent to 3.9 percent.
We're currently seeing mild support for the Aussie above US dollar parity with current price action buoyant around the 100.3 US cent levels. The day ahead will see participants focus on a speech from RBA assistant Governor Phillip Lowe; however with traders well truly informed of the state of play from the RBA we do not expect this to have a sustained impact on price activity. The next major event risk for the local unit will come in the form of US consumer price data due this evening which is expected to show annual inflation growth of 1.6 percent from a previous 1.5 percent. If there's a catalyst for a near-term reversal for the greenback this is it - should we see any deviation to the topside of estimates we can expect interest rate conjecture to manifest in USD price action.