- AUD/USD remains on track to post strong gains on Monday.
- US Dollar Index lost its traction in the American session.
- Wall Street’s main indexes rise sharply on upbeat US data releases.
After staying relatively quiet around 0.7600 in the first half of the day, the AUD/USD pair gained traction and touched its highest level since March 30 at 0.7661. As of writing, AUD/USD was up 0.66% on the day at 0.7656.
The heavy selling pressure surrounding the greenback fueled AUD/USD’s rally on Monday. The US Dollar Index, which tracks the USD’s performance against a basket of six major currencies, fell to its lowest level in more than two weeks at 92.54.
The risk-positive market environment on the back of strong data releases made it difficult for the USD to find demand as the S&P 500 and the Dow Jones Industrial Average indexes both notched new record-highs after the opening bell.
Following Friday’s impressive jobs report, which showed an increase of 916,000 in Nonfarm Payrolls in March, the ISM reported on Monday that the Services PMI jumped to its best level on record at 63.7 from 55.3 in February.
Focus shifts to RBA
In the early trading hours of the Asian session, the Reserve Bank of Australia (RBA) will announce its Interest Rate Decision and release the Rate Statement.
Previewing the RBA meeting, “we think the RBA will keep policy settings unchanged at the meeting on 6th April,” said analysts at Capital Economics. “Later this year, we expect the Bank to announce a further extension to its asset purchase programme. We think the market is overzealous in pricing in rate hikes as early as next year.”
Technical levels to watch for