The AUD/USD is trading at $0.9337, down 0.17% after the Australian Industry Group construction index came in at 45.9 for April. The reading for March was 46.2, and any reading below 50.0 indicates a contraction in the sector. Overnight, Australia also reported a 0.1% increase in March retail sales, with analysts expecting an increase of 0.4%.
The main focus of the day will be on Federal Reserve chair Janet Yellen, who is due to testify in front of congress at 3pm (London time). The US central bank trimmed its bond-buying scheme by $10 billion to $45 billion last week, in line with expectations.
Ms Yellen’s stance has been dovish since she took over as Fed chair. However, now that unemployment has dropped to 6.3%, the lowest level since September 2008, Ms Yellen may take a more hawkish tone.
If Ms Yellen maintains her dovish stance we could see the Australian dollar retest the $0.94 level. If her language is more on the hawkish side we could target the 50-day moving average of $0.9241.