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  • AUD/USD is rising after closing the previous week higher.
  • US Dollar Index pushes lower toward 92.00 on Monday.
  • Focus shifts to Markit PMI data from the US. 

The AUD/USD pair closed the previous week with small gains and continued to push higher on Monday with the greenback struggling to find demand. As of writing, the pair was up 0.45% on a daily basis at 0.7335.

DXY slides as risk flows dominate the markets

The risk-on market environment on heightened coronavirus vaccine optimism continues to weigh on safe-haven assets at the start of the week. The US Dollar Index (DXY) is currently at its lowest level since early September at 92.09, losing nearly 0.3% on the day. 

Reflecting the upbeat mood, major European equity indexes are up between 0.4% and 0.75% and the S&P 500 Futures are gaining 0.6%, suggesting that Wall Street will start the new week on a strong footing. If risk flows continue to dominate the financial markets in the second half of the day, we could see the USD continue to weaken against its rivals. 

Earlier in the day, the preliminary Commonwealth Bank Services PMI and Manufacturing PMI for November showed that the business activity in both sectors continued to expand at a robust pace and provided a boost to the AUD.

Later in the session, the IHS Markit will release the November Manufacturing and Services PMI reports for the US. In the early trading hours of the Asian session on Tuesday, the Trade Balance data will be featured in the Australian economic docket. 

Technical levels to watch for

 

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