AUD/USD climbs to fresh multi-month highs above 0.6780 on fresh USD selloff

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  • AUD/USD gained traction during American trading hours and rose above 0.6780.
  • Broad-based selling pressure surrounding USD fuels the pair’s rally.
  • Major equity indexes trade in the positive territory after opening in the red.

The AUD/USD pair started the week on a positive note and rose to its highest level since late-January at 0.6777 in the early trading hours of the European session and went into a consolidation phase.

With the selling pressure surrounding the greenback intensifying during the American session, the pair gained traction and renewed its multi-month tops above 0.6780. As of writing, the pair was up 1.75% on a daily basis at 0.6783.

Earlier in the day, the upbeat Manufacturing PMI data from China, which showed an ongoing expansion in the sector, helped the AUD gather strength against its rivals.

In the second half of the day, the US Dollar Index (DXY) started to push lower after the Manufacturing PMI data published by both the ISM and the IHS Markit showed an improvement in May. Moreover, despite the widespread unrest in major US cities, Wall Street’s main indexes erased early losses and moved into the positive territory on Monday to reflect a risk-on environment. At the time of press, the DXY was down 0.47% on the day at 97.85.

Eyes on RBA

On Tuesday, the Reserve Bank of Australia (RBA) will release its monetary policy statement and announce its interest rate decision. 

Previewing the RBA meeting, “recent RBA commentary suggests outcomes are better than the Bank’s central forecast but below the optimistic scenario,” noted RBA analysts. “This gives the RBA time to assess developments till September which is when most fiscal measures are anticipated to roll off.”

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