AUD/USD climbs to fresh session highs near 0.6630, eyes on US data

• RBA's Debelle says they have capacity for one more rate cut.
• Australian economy expanded by 2.2% annually in fourth quarter.
• ADP Employment Change in US is expected to fall to 170K in February.

The AUD/USD pair gained traction during the Asian trading hours on the back of upbeat GDP data from Australia and the improving market sentiment. Although the pair staged a technical correction and dropped below the 0.66 handle in the European morning, it has started to edge higher in the last hour. As of writing, the pair was trading at a fresh daily high of 0.6627, adding 0.66% on a daily basis.

Australian Q4 GDP figures boost AUD

The data published by the Australian Bureau of Statistics on Wednesday showed that the economy grew by 2.2% on a yearly basis in the fourth quarter following the 1.7% expansion recorded in the previous quarter and beat the market expectation of 1.9%.

Commenting on this data, Reserve Bank of Australia (RBA) Deputy Governor Debelle said the reading was in line with their view of a "gentle turning point" in the economy. Regarding the policy outlook, Debelle noted that the RBA has the capacity to reduce its policy rate one more time but the negative impact of this remark on the AUD was short-lived.

On the other hand, after falling sharply amid the Federal Reserve's 50 basis points rate cut on Tuesday, the US Dollar Index (DXY) is registering recovery gains ahead of key macroeconomic data releases. At the moment, the DXY is up 0.22% on the day at 97.36. The US economic docket will feature ADP Employment Change, Markit Services PMI and ISM Non-Manufacturing PMI data. 

Technical levels to watch for