AUD/USD slumps to 0.6370 area on broad USD strength

• US Dollar Index edges higher toward 97 on Wednesday.
• Risk aversion on coronavirus concerns continues to weigh on AUD.
• Coming up from US: Weekly Initial Jobless Claims and February PPI data.

The AUD/USD pair closed the previous day a little below the 0.6500 handle on Wednesday and extended its slide as the dismal market mood took a toll on the risk-sensitive AUD. As of writing, the pair trading at 0.6377, erasing 1.65% on a daily basis.

USD gathers strength on risk aversion

Heightened fears over the coronavirus outbreak causing a protracted global recession amid a surging number of confirmed cases force investors to seek refuge and the USD seems to be capitalizing on risk-off flows. Despite a sharp drop witnessed in the 10-year US Treasury bond yield, the US Dollar Index climbed to a fresh weekly high of 96.96 on Wednesday.

Ahead of the weekly Initial Jobless Claims and the February Producer Price Index (PPI) data from the US, the Index is up 0.15% on the day at 96.75.

Meanwhile, this week's data from Australia revealed that both the consumer and the business confidence deteriorated in February to reflect the negative impact of coronavirus on sentiment.

There won't be any macroeconomic data releases from Australia on Friday and investors are likely to continue to react to the market's risk perception.

Technical levels to watch for